Hong Kong, Jan 23 (SocialNews.XYZ) Over the past three years, about $6 trillion -- equivalent to roughly twice Britain’s annual economic output -- has been wiped off the value of Chinese and Hong Kong stocks, a media report said.
The Hang Seng index has crashed 10 per cent so far this year alone, while the Shanghai Composite and Shenzhen Component indexes are down 7 per cent and 10 per cent, respectively, CNN reported.
The astonishing losses, reminiscent of the last Chinese stock market crash of 2015-2016, highlight a crisis of confidence among investors concerned about the country’s future.
“The past three years were no doubt a challenging and frustrating period for investors and market participants in Chinese equities,” Goldman Sachs analysts wrote in a research note on Tuesday.
“China … [is] currently trading at suppressed valuations and decade-low allocations across [investment] fund mandates.”
The world’s second largest economy is plagued by a myriad of problems. They include a record downturn in real estate, deflation, debt, a falling birth rate and shrinking work force, as well as a shift towards ideology driven policies that has rattled the private sector and scared away foreign firms, CNN reported.
The stock meltdown has made Chinese markets the world’s worst performers so far this year. And all this is playing out against the backdrop of a global stock market rally, led by Wall Street’s record-setting run, and by Japan in Asia, CNN reported.
Source: IANS
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