Chinese Stocks Climbed to its Five Year High in Last day of Trading
China’s stocks has climbed to a near five year high on the last trading day of the year, as the stock market ended with more than 50 percent the best annual performance by a major global stock market for 2014 after years in the basement.
Chief director of research department Tian Weidong said that this year will be unexpected and it took people by surprise as they thought that this kind of market was not possible. The benchmark Shanghai Composite Index was gained nearly 2.18 percent up to 3,234.68 points or 52 percent to date. The largest listed companies in Shanghai and Shenzhen also increased by 2.20 percent or 3,533.71 points and ended up having 51.7 percent for the year. All of the increase came in the last couple of months as banks and brokerages hoped for more aggressive policy stimulus to counter the economic slowdown.
The increase is a major accomplishment for the government as they have successfully convinced investors to cease speculating on real estate and to push diversification into shares in companies. Analysts are see another bull year for 2015 but thinks that it will be balanced against predictions that the Chinese economy is said to slow further, thus damaging earnings in blue chip banks.
Meanwhile contradictions are highlighted in the index measuring price difference in dual listed companies in Shanghai and Hong Kong that stands at 127.76 which indicates the Shanghai shares are priced at a major premium. These difference is supposed to be erased during the launch if the Shanghai Hong Kong stock connect but has seen a weak take up in both foreign and domestic investors.