China’s retail investor sours quickly on stocks
Live Mint* Chinese stocks suffered weakest start to new year in a decade * Retail investors sell amid US trade policy uncertainties * Further selling could trigger stampede, hurt economy * Beijing's half-hearted policies lead to investor disillusionment By Samuel Shen and Summer Zhen SHANGHAI/HONG KONG, - Day-trader Lu Delong's optimism for a China stocks rally quickly evaporated in the first week of the year when, just three months after positioning for a surge fuelled by Beijing's stimulus pledges, he was forced to dump shares and tally his losses. Many retail investors like Lu sold shares in early January, precipitating the weakest start to the new year in almost a decade for China's $11 trillion stock market. The government needs a sustainable bull market to fund economic revival but another boom-and-bust would "destroy wealth, hurt consumption and harm China's economy", said Dong Baozhen, chairman of Beijing-based asset manager Lingtong Shengtai. To forestall another crisis, China should aggressively expand the central bank's balance sheet and set up a sovereign market stabilisation fund, as "when the wood is wet, you need a much bigger fire to set it ablaze", retail investor Zhang said.