China has been the main beneficiary of the stock market’s meteoric rise, with the country’s benchmark benchmark stock index soaring from a record low of 6,837 points in June 2016 to an all-time high of 6.3 million points in May 2017.
The index has soared from 3,973 points in April to 5,087 points in March and is currently on track to hit a record high of 7,637 by the end of the year.
But there are also signs that some of the boom is over, with some analysts expecting a return to more cautious trading patterns, and even a return of some of China’s traditional gyrations in the stock index.
China’s stock market index, or CSI, is seen at a high in Hong Kong Thomson Reuters/Reuters”I think that the CSI is really the gold standard for the country, and so it is likely to be a long-term trend,” said Andrew Hsieh, chief executive of Hong Kong-based asset manager HSE.
“But there is a risk that as the CSI rises, it will get a little more cautious in terms of what it does and how it does it.”
China’s CSI is a benchmark index for the nation’s economy based on prices in the Chinese currency.
It has climbed from an all time low of 7.8 million points on June 16, 2016, to an annual record of 6 million points, and it has since been climbing steadily, rising above 7 million points each of the past three years.
It has gained more than half of its value since March and was up more than 2% in June.
The benchmark index has grown at a compound annual growth rate of 5.2% in the past year, which is a huge improvement on a 7% growth rate from March.
“If you look at the history of the CSI, you will find that its been fairly stable over the years, but there have been periods where it has gone up,” Hsieb said.
The Shanghai Composite Index, which measures the broadest measure of Chinese stocks, has gained a compound average of 1.9% a year since it started tracking in June 2017.
It was down 3.6% in May and 1.7% in April, and has gained about 14% a month since.
The Beijing Composite Index also rose, rising 4.1% in 2017.
China has a market capitalisation of about $20 trillion, making it the world’s largest economy and a world leader in technology and finance.
Its currency has appreciated more than 11% against the dollar since January 2018, while the country has a stock market with an estimated 10.8 trillion yuan ($20 trillion) in market capitalisations.