Shanghai Stock Exchange
The SSE (Shanghai Stock Exchange) Composite Index is the core index of the Shanghai Stock Exchange. It consists of all securities quoted on this market (both Class A and Class B shares). Its calculation is based on the total market capitalization of all inventories on December 19, 1990, with a base value of 100.
Shenzhen Stock Exchange
The SZSE (Shenzhen Stock Exchange) is one of three stock exchanges in the People’s Republic of China and is based in Shenzhen, Guangdong. The Shenzhen and Shanghai stock exchanges list more than 1,250 firms, with a combined capitalization of 500 billion US dollars (2005), or 30% of the country’s GNP, allowing them to compete with the Hong Kong stock exchange for Second Asian stock market after Tokyo. On the Shenzhen stock exchange, only companies with a capitalization of more than 6 billion yuan will be able to open their capital to foreign investors. On the Hong Kong stock exchange, Chinese investors must have a portfolio of more than 500,000 yuan.
Is the Shanghai and Shenzhen Stock exchanges tumble serious?
Yes, it’s serious financial crisis, not only for China but for the whole world. Indeed, twice in one week, the Shenzen and Shanghai stock exchanges were automatically closed after the stock market crash. Last summer, they had experienced a fall that was even more brutal considering the huge rise that occurred in 2015 : + 150%. The bubble eventually exploded.
China Economy Slowdown
Stock markets are often considered as an accurate tool to judge how healthy an economy is. For a decade, China has seen its GDP and economy booming like in no other country in the world. However, since July 2015 and the first Chinese financial crisis, the economic growth stumbles. The Chinese government claims that it was 6.9% in 2015, which is the lowest rate in 25 years. And it could be worse: economists reduce this figure to 2 or 3%, because many sectors are down: imports dropped 15% last year and exports also suffered. In China, the stock market crash can have serious consequences. The growing middle class, about 200 million people, invested half of its savings on the stock exchange, often using bank loans, and the other half in real estate. The housing sector is also going through a major crisis translated into a fall in prices as the real estate bubble keeps swelling and has never been so close to burst. explosion.