The combined volumes traded in the two Chinese stock exchanges of Shenzhen and Shanghai now account for more turnover than that of Japan.
That is according to figures from CIMB Securities that collate statistics from the entire region.
“China is now back to being the highest volume market, so it has surpassed Japan in the last couple of months and that has not been seen since the China market was way north of here,” said Andrew Freyre-Sanders, the head of equity execution services at CIMB Securities in Hong Kong. “The liquidity of trading in China is big, it is liquid. In terms of average US Dollar daily volume, it has traded back up there, which is interesting because obviously the markets themselves have not risen much, so there are increasing activities in China.”
The Shenzhen and Shanghai stock markets recorded US$11.13 billion and US$ 9.5 billion per day respectively in May 2014 and US$12.6 billion and US$12.7 billion during April 2014.
CIMB’s figures draw data from turnover on Topix, the Tokyo Stock Price Index. In May 2014, average turnover was US$17.9 billion per day and in April it was US$18 billion per day.
During the last year, the Japan markets have not managed to exceed the traded volumes of May 2013. Turnover then was approximately 50% higher than it is at present.
The pair of mainland China stock markets and the Japanese bourse rank as the biggest in daily average volumes in Asia by a large margin. Ranking behind them in May 2014, according to CIMB Securities, were Hong Kong with US$5.4 billion per day and India with US$4 billion.
The increase in China’s volumes may be a harbinger of renewed investor interest, though there has been little upward movement in Chinese indices to substantiate that. During periods of quieter turnover the markets have languished. In 2013, the CSI 300 Index, the benchmark China’s larger companies fell by 14% and the Shanghai Composite index dropped by 12%.
“If you think about how you access China right now, what are the big liquid markets?” said Freyre-Sanders. “You have got onshore China, Singapore futures, you have got ETFs galore which are now launched in the US and Europe, you have got A shares and B shares, P-notes, swaps. China must have one of the greatest plethora of different ways in such a restricted market and now the Stock Connect.”