Trillions in sidelined cash could soon hit the stock market in China, fuelling year-end fireworks for an already hot equities market.
Chinese households are sitting on roughly $23 trillion in deposits, a sum that analysts believe could serve as the fuel for a powerful rally in domestic stocks, Bloomberg reports.
-->Xu Dawei, a fund manager at Jintong Private Fund Management, described the cash pile as the cornerstone of a new rally, saying that deposits shifting into stocks has already begun and “there’s no turning back.”
JPMorgan Chase estimates that as much as $350 billion could move into Chinese equities between now and the end of 2026, potentially driving a surge of more than 20 in stock prices.
HSBC Holdings cited the savings stockpile as a potentially “very positive catalyst” when it lifted its targets for the country’s two biggest indexes, the CSI 300 and the Shanghai Composite Index (SSE Composite).
And Goldman Sachs analysts have cited the excess savings when upgrading their target for the CSI 300, with the bank now predicting about a 10 rally over the next 12 months, according to Bloomberg.
The CSI 300 climbed about 10 in August alone, making it one of the top-performing equity indices worldwide. Policymakers are also lending support, with state-backed funds and institutional mandates helping to stabilize sentiment and reinforce the uptrend.
Source: Bloomberg
