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China’s stock market value hits record high of more than $10tn

The total value of China’s stock market has climbed to a record high of more than $10tn, as the country’s accelerating economic recovery propelled it past the previous peak hit during an equities bubble five years ago.

The market capitalisation of all shares listed in Shanghai and Shenzhen hit $10.08tn according to Bloomberg data compiled on Wednesday based on the previous day’s close. The benchmark CSI 300 closed 0.7 per cent lower on Wednesday.

That is above the $10.05tn pinnacle hit in June 2015 immediately prior to a historic rout sparked by a crackdown on leveraged trading, which resulted in the Chinese market plunging by half. But analysts said despite this year’s rally, stocks are less frothy than during the bubble of 2015, when retail traders drove valuations to eye-watering heights.

“Investors are looking for growth and finding it very scarce elsewhere — so they see an enormous amount of opportunity in China,” said Craig Coben, co-head of Asia Pacific global capital markets at Bank of America.

The CSI 300 has rallied about 17 per cent this year, compared with 9 per cent for Wall Street’s S&P 500. The Shanghai and Shenzhen markets have sucked in about $26.5bn in global funds through stock connect programmes with Hong Kong, partly due to optimism over the Chinese economy’s recovery from coronavirus, which has outpaced that of the US.

On Tuesday, official data showed China’s imports for September hit a record dollar amount on the back of appetite for commodities and semiconductors. The renminbi has also strengthened against the dollar in recent weeks on expectations of a Joe Biden win in November’s US presidential election and optimism over a reset in relations between the two superpowers.

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