Investors looking at stocks information in Anhui Province, China. (Photo : The Malay Mail Online/Reuters)
Regardless of the turmoil hitting major markets, online wealth funds and stocks prove to be popular as small investors are now moving their money into online funds.
Investors' money has merged with the millions of dollars sent in by foreign private equity firms and major domestic players.
Just recently, the shares on the Shanghai Stock Exchange Composite Index closed at a seven-year high. This is a breakthrough record for the first time since 2008, when the composite index reached a 5,000 level.
Matthew Plowright, a principal of China Confidential, said that the policy is acting as a new driver of money supply and (helping) to accelerate the pace of state-owned enterprise reform.
"We predicted that domestic stock markets would enjoy significant policy support in the coming years, because of their central role in attracting overseas liquidity back to the Chinese mainland," said Plowright.
A survey by China Confidential revealed that almost half of the 1,000 polled believed it was a "good time" to invest in yuan-denominated A shares.
In more than 300 Chinese cities surveyed, only 18.5 percent of the participants felt it was a "bad time" to invest in stocks.
The success of online money market funds like Yuebao and Licaitong are putting pressure on traditional bank deposits.
"The popularity of Internet wealth management products has remained intact, despite the recent re-allocation to shares," added Plowright.
He furthered that other Internet products, such as peer-to-peer lending, have also seen strong growth, although high-profile defaults have raised concerns about the potentially risky nature of these investments.
