It’s finally happened, dear readers: The Shanghai Composite Index soared past the 5k marker on Friday, closing at a vertigo-inducing height of 5,023.10 points. We always knew it would, of course. We’re preternaturally talented at such predictions, as befits an economics and business magazine. Did we sweat it when the index fell 6.5% last Thursday? Of course not. We doubled down by publishing a feature explaining why the bubble wasn’t about to pop just yet later that very evening, and wouldn’t you know it–on Friday stocks leveled off.
So naturally when we learned the president of the branch of China’s sovereign wealth fund which analysts were blaming for dip would resign, we threw every last cent we owned into Shanghai’s bourse. Good thing too, since the CSI300 Index rose 4.9% on Monday. Now it looks like we’re not the only ones banking on continued growth in China’s farcically valuable stock market.
Among the many salivating over the Shanghai exchange’s prospects is the Shanghai exchange itself: It announced this week that it would launch four new indices on June 24, including one tailored to industries relevant to President Xi Jinping’s “One Belt, One Road” international infrastructure initiative. Now, we’re not saying the current rally is policy-driven, but… wait, no, that’s exactly what we’re saying. And directing retail investors’ money toward cash-strapped, overcapacity industries like infrastructure and equipment manufacturing was a masterstroke.
Perhaps all that policy support helps explain why Vanguard Group was so eager to add mainland Chinese stocks to its emerging markets exchange traded fund. With all the ruckus surrounding MSCI’s possible addition of A-shares to its index benchmarks, we’d say this qualifies as a positive sign–though whether increased interconnectedness with the world’s most volatile equities market is a good thing for the rest of the world is, of course, another matter. Just ask the employees over at Hanergy, who were sold discounted stock in the company just before shares lost nearly half their value–all months after it had allegedly come under investigation by regulators for alleged market manipulation. Allegedly.
But as Alibaba well knows, you don’t have to list in China to strike it rich. The house that Jack Ma built is apparently planning to invest more than a billion yuan in financial news outfit China Business Network, Reuters reported. No doubt the British news wire took a moment at some point to reflect on the possibility that it and Bloomberg both might be out of a job in China if the e-commerce conglomerate were to up and decide to turn its latest investment target into a home-grown financial information service.
But if Jack Ma is in such a media-centric mood, dear readers, we happen to know a little business and economics publication he’s welcome to throw a few million yuan at, should the mood strike him.