Chinese investors unfazed by chaos

Thursday, March 1, 2007

BEIJING: Yan Youmei has never invested in stocks, or even read the market sections of the newspaper, but the 56-year-old Beijing seamstress smells money in the Chinese share market’s recent plunge. “If I don’t make money I won’t be happy, but I won’t be happy if I don’t try,” she said. A day after investors fled Chinese stocks, contributing to a worldwide sell-off, Yan was one of many Chinese—known for their love of a good punt—who clamored to open new accounts in the belief that now is the time to pile in. “They say they can’t open any more new accounts today but I’m not leaving until they do,” Yan said, pulling up a chair in front of a service window at a Beijing brokerage and folding her arms in defiance. A day after Shanghai stocks suffered their biggest one-day losses in 10 years, stock-market bears seemed more endangered in China than the panda, with brokerages in Beijing reporting a spike in new accounts since the fall. It reflects a recent trend—on Monday, 130,075 new individual trading accounts were opened in the Shanghai and Shenzhen stock markets, compared to about half that level a day earlier in the month, according to the China Securities Depository and Clearing Corp.’s website. Staff at a Beijing branch of CITIC Securities were busy Wednesday fending off an insistent crowd of new account applicants such as Yan. “It’s been like this since late last year when the market kept going up, but I think there are even more people now because they feel stock prices are now cheaper,” said Luo Canyu, one of the branch’s managers. Such was the rush that he eventually called in building security guards to keep order. Relaxing during the midday market break by playing cards under a bank of stock screens, investors who suffered losses the day before took those in stride as part of the game. Many were now looking to double down, betting on an eventual rebound while lamenting a lack of other decent investment opportunities. Taxi driver investor “Investing in stocks is my only route,” said Jing Lian, a Beijing taxi driver who on Tuesday sold off most of the shares he had accumulated since late last year. Though he posted a slight loss, Jing still turns his nose up at the thought of investing in something long-term and stable such as real estate. “That’s no good. I don’t want to wait so long for the payoff. If I could wait that long, I wouldn’t be driving a taxi,” he said. Similar sentiments were expressed on Wednesday in online Chinese blogs, where stock-market rumors and advice—much of it unfounded—are passed around. “I’m the typical newcomer—fearless and dauntless in the face of death. I am still buying in, actively. The more the market tumbled, the more I bought in,” said a blog user named “Fly in the Green Mountain and White Clouds” in an entry on jrj.com, a popular Chinese financial website. Yang Donghui, a government employee who lost several hundred US dollars on Tuesday, sulked out of the CITIC branch at midday in disappointment that his steel and utilities had failed to rebound. But he expects a new bull run fueled by the 2008 Olympics and rumors that foreign investors may soon be allowed unfettered access to Chinese markets. “Maybe I’m wrong, but I’m staying in the market,” he said.

http://www.manilatimes.net/national/2007/mar/01/yehey/top_stories/20070301top2.html