70 Million Investment Accounts
January 28th, 2004New CSRC statistics show that there are now more than 70 million securities trading accounts in China, according to this Xinhua story.
While China’s rapid progress in building securities markets is noteworthy, both the Green and Walter/Howie books published last year deconstruct this type of aggregate number. They show that the actual number of investors in China’s stock markets is much smaller than what is suggested by looking at the aggregate number of trading accounts that have been opened. The number of traders is immediately halved because investors must open separate accounts to trade shares listed in Shenzhen and Shanghai. Then there is a considerable problem with multiple accounts being used by single investors (and an apparently smaller converse problem of multiple investors using a single account). Also, many accounts are inactive or become active only when lucrative IPO subscriptions are on offer. Indeed, the number of active traders may be only a small fraction of the number of accounts.