May 26, 2007
Shanghai A-Share Turnover: Historical Perspective
Here’s a historical look at the Shanghai A-share market turnover (in US dollars). This chart is arithmetically scaled to give it the drama it deserves. Keep in mind that this is only the Shanghai A-share market and the chart does not include the turnover in the A-share market in Shenzhen or the B-share market in either city. If you add them all up, China is doing over $50 billion in daily turnover these days. Wild!
Cat: | Time: 7:10 am (utc+8) Comments (0)
May 26th, 2007 at 8:17 am
Wow! Awe inspiring. Yet, who knows how much more jaw dropping it will get before the inevitable collapse.
Since you’re actually over there, can you provide any anecdotes? Has your doorman retired? are taxi drivers poring over charts and getting into accidents? are shoe shine boys dispensing stock tips?
May 26th, 2007 at 8:38 am
Amazing. What is your sense for what the authorities are going to do about this? Clearly there is a train wreck coming. The only question is sooner or later.
May 26th, 2007 at 10:51 pm
It’s even more inspiring when you adjust it for market cap …
Babak: Yes, taxi drivers have asked me for stock tips and yes, my manicurist has been pulling in six figures a month for a good long while now (in addition to the $8 I give her, lol).
libertas: What can they do? There’s $4 trillion sitting in banks earning a negative real return and it wants out.
May 27th, 2007 at 4:52 pm
The turnover is pretty huge, however, I guess it is still far from the peak. It seems that the whole nation goes mad and everyone is trying hard to profit from the stock market, and the situation won`t be changed in a short time.
May 29th, 2007 at 11:02 pm
The chart is terrifying – clearly a bubble in terms of valuation and sentiment. I wonder though if it has already gone too far for the Chinese govt to do anything about it. If they attempt a slow deflation of the speculative excess, they risk causing a crash in the year before the Olympics, with inevitable public demonstrations and a lot of negative publicity. If they do nothing, it could run a lot further, but the decline will be that much worse when it does happen.
I question what impact a crash would have on the rest of the world. Any ideas?
May 30th, 2007 at 8:17 am
Thistle: You ask the $64,000 question: would a crash here cause problems elsewhere? In practical terms I don’t think it would have that great an effect, but psychologically it might shake up people everywhere.
June 25th, 2007 at 12:03 am
ouch. The economist did a sloppy job of writing about this bubble and got it wrong. The political fallout from this will be large.
July 6th, 2007 at 10:42 pm
[...] I thought it would be useful to post a chart of the Shanghai Composite Index together with the A-Share turnover chart. The Shanghai Composite peaked on May 29th at 4,336. The A-Share turnover peaked on May 30th at $35 billion after the market broke following the stamp tax news. (Prior to the market break, I wrote posts on May 25th and 26th about the crazy turnover.) [...]