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No more ‘Wild East’: China’s Stock Market Is Growing Up Fast

By Advisor Perspectives
Financial Services

The Chinese stock market is changing at breathtaking speed and is on track to reach maturity faster than any other in history. Global investors have been reluctant to dive in, but there are good reasons to get acquainted with the companies serving the world’s second-largest economy.

A Stock Market’s Adolescence

Many investors prefer mature markets, where they can invest relatively easily, the government leaves the market more or less alone and provides consistent oversight, and companies disclose their finances, operations and risks so investors can make informed decisions.

China’s current A-shares market, which is composed of stocks that trade on the mainland exchanges, looks a lot like the US stock market circa 1965. It’s still unevenly regulated, marked by patchy governance of its listed companies, and dominated by retail investors, whose tendency to buy high and sell low can exacerbate volatility.

Read more at Advisor Perspectives.

Photo: Gonzalo Pineda Zuniga

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