Investors watch an electronic board showing stock information at a brokerage office in Beijing, July 7, 2015.
Nearly one third of small investors, or more than 20million,have fled the turbulent stock market.
The number of small investors holding stocks in their accounts slid to 51 million at the end ofJuly from 75 million at the end of June, according to China Securities Depository & ClearingCorp, the government agency that tracks accounts. Shanghai Composite Index plunged 14percent, a record single month drop in six years.
Unlike institutional investors dominated US stock market, small and individual investors aremajor players in Chinese stock market. According to data from China International CapitalCorp, small investors hold about 80 percent of outstanding shares of public companies.
Since the start of market plunge after it hit peak in mid June, government rolled out series ofeasing policies and measurement, but the results have had limited impact. At end of JulyChinese investors have suffered loss of 6.8 trillion yuan ($1.1 trillion).
Despite stocks becoming cheaper due to market plunge, fewer people are entering themarket. Compared to June, 20 percent fewer new accounts were created in July.
Bank deposit is still the favorite investment tool for Chinese families. Up to 50 percent ofdisposable income will end up in families’ saving account, according to data from World Bank.Due to recent volatility, it is unlikely that many families will move their money from savingaccount to stock market.
