Saturday, May 26, 2007
This chart is from Maoxian's blog. It just shows volume of the Shanghai A shares. It does not include the Shenzhen market which is smaller or the dollar denominated B share market. The latter market has been extremely volatile recently. The Chinese market suffered a severe bear market that ended in 2005 and has since boomed crazily as everyone knows. Earnings of Chinese firms are supposedly growing very fast but the P/E ratio on the A share markets are higher than in the B share markets or of Chinese stocks listed on the Hong Kong (H shares) or New York markets. But I didn't realize how low the volume was in the previous boom-bust cycle compared with today. Volume on the Mainland Chinese markets is now similar to that in the US stock markets even though at the official exchange rate the Chinese economy is much smaller than the US economy and fewer firms are listed.