The Shanghai Composite has been one of the world’s most keenly watched bourses for obvious reasons. The following stock market trading strategy is an easy way to make money in the stock market and to hedge. These include ordering brokerage companies to purchase billions of dollars’ worth of shares, freeze IPOs, prevent investors with more than 5% holdings in companies from selling their shares for a period of 6 months, curtail pension funds from jeopardising market stability etc. Another critical fact should be pointed out about the Chinese stock market and the average Chinese household: approximately 15% of Chinese households are invested in the stock market. From 1983 through 2015 the balance of trade in the country has averaged $72.04 billion.
But there is still a lot of work to be done to resuscitate confidence in the Chinese stock market In order to keep sentiment positive, the provision of credit must be ensured. In the years from 1990 through 2015, the Chinese stock market averaged 1757.09 index points. The Shanghai Composite monitors the performance of A-shares + B-shares that are listed on the Shanghai Stock Exchange. In China, the balance of trade has been in surplus for the last year; however since May 2015 the surplus has been declining.
For June 2015 the balance of trade surplus was $46.54 billion, and for July 2015 the balance of trade was $43.03 billion. Since short selling has been blocked, further declines in stock prices have been avoided. The majority of trading in the Chinese stock market is through individual investors who tend to avoid funds. Despite plunging Chinese equities, scores of individual equities have emerged as the world’s best performing stocks owing to bullish performance earlier on in 2015. Combined, the Shenzhen Stock Exchange and the Shanghai Stock Exchange are valued at $8 trillion.
It is likely that the focus will shift from small cap stocks to medium-large cap companies, following a period of consolidation in the market. Traders will recall that CEO of Alibaba – Jack Ma – wanted his company to be bigger than Amazon, when it started trading in the US. Alibaba ( BABA ) has been declining for 8 consecutive days (By August 8, 2015), amid bearish prospects for the Chinese economy.
In New York, the stock was trading at $77.99, marking the longest decline since it debuted in September 2014. But since 85% of Chinese households have absolutely nothing to do with the stock market and there is a rising middle class in China – the buying potential of over 1 billion people is substantial. So just as the federal government sells bonds to raise money, businesses raise money by selling stock.