Retail investors’ influence in China’s stock market is fading as institutional dominance grows, standing in contrast to a global surge in amateur trading that has grabbed headlines from New York to Seoul.
Professional investors’ holdings of freely floating shares in Shanghai and Shenzhen climbed to more than 70 per cent between a stock market crash in 2015 and June 2020, according to China Renaissance, an investment bank. Those held by amateur traders have dropped from about 50 to 23 per cent in the same period.
That is at odds with the US, observers say, where the rise of fee-free trading platforms such as Robinhood has prompted an increase in retail investor participation and wild swings in some stocks. It has also raised questions about what the world’s largest stock market can learn from China, where regulators have crimped retail traders’ capacity to induce huge bouts of volatility.