Exchanges in China
- Shanghai Stock Exchange (SSE)
- Beijing Stock Exchange
- STAR Market - an exchange focused on local technology companies
Chronicle
2025
Market capitalization growth by 31% for the year
The state owns a 64% stake in Chinese companies
According to MSCI, only 36% of Chinese A-shares (nominated in yuan) are in free float. Everything else is controlled by the state - another confirmation of the dominant role of the government.
At the same time, the largest companies have even less. Examples: China's largest companies have a meager free float - Agricultural Bank of China (~ $350 billion cap) has only 7.5%, Bank of China - 5.1%, PetroChina - 4.8%.
But this free float is also specifically distributed:
- 46% - among the corporations themselves (through baibeki and treasury shares),
- 27% - retail investors,
- 4% - foreigners,
- the remaining 23% are local institutional structures: funds, pension and insurance companies (often also with state participation).
There are almost no real sources of massive market demand. When the state announces new share buyback programs, this is rather a signal of weakness - if in the market, where 80% of players are institutional, no one buys securities, then there is simply no demand for them.
2024
China's GDP has grown rapidly for a decade, but stocks are stomping sideways
In the long term, search there is a steady correlation between GDP growth and equity returns as a growing economy boosts corporate profits, translating into higher share prices.
However, this is not always the case and a vivid example - China, where over the past decade there has been a powerful economic boom, but Chinese stocks disappointed investors: the MSCI China stock index has been in place since 2010.
The top 10 companies account for more than 45% of capitalization and only 19% of profit
As of October 2024, in China, the top 10 companies occupy more than 45% of capitalization, and give profit only 19%.
Sharp reduction in IPO volume
Record ratio of cash in the accounts of tech giants to their capitalization
The multipliers of Chinese tech giants are at global lows by September 2024 and are no longer in line with the tech sector.
The huge share of cash in many as a percentage of market capitalization indicates the concentration of Chinese companies on the return of capital to shareholders.
Benchmark CSI 300 index hits five-year low
Premier of the State Council of the People's Republic of China Li Qiang called for more effective measures to stabilize the falling Chinese stock market after the CSI 300 benchmark reached a five-year low on January 22, 2024.
2021: Chinese stock sell-off as regulatory restrictions intensify
2020: Capitalization growth to $10 trillion
In October 2020, the Chinese stock market exceeded $10 trillion for the first time since 2015.
The world's second-largest stock market added $3.3 trillion after a low in March, helped by Beijing's policies to encourage stock trading, a flood of new listings and a stronger yuan.
According to data compiled by Bloomberg on October 12, the country's total market capitalization is now $10.04 trillion, slightly below the record level.
In the US, the world's most valuable stock market stands at $38.3 trillion.
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