In times of adversity, investors seem to have become all the wiser managing their wealth, and know when and where to bet their bottom dollar.
Guan Qiang, a market development specialist in the human resource industry on the Chinese mainland, may be exhibiting the skills of an avid investor, riding on the wave of the positive impact on health-related products and services from the coronavirus pandemic.
He has opened up more than 20 Hong Kong stock trading accounts online in recent two months, sinking up to 20,000 yuan (US$2,820) into each of them and planning to visit Hong Kong at an opportune time to tap deeper into the equity market.
The impetus came after he raked in profits of more than 50 percent from a stake in an initial public offering involving cancer-drug developer Akesobio in April.
Amid a consumption and investment spree on wealth management products fanned by the pandemic, mainland consumers are going the extra mile, to the cheers of Hong Kong’s financial market.
If data from Hong Kong-based brokerage firm Futu Securities is anything to go by, it’s a bumper harvest for securities houses. The number of Futu’s new clients and transaction volume increased by about 150 percent year-on-year in the first quarter this year. Its online trading platform also saw its daily trading volume record shattered during the period.
Investors’ focus on and enthusiasm for stocks market is on the rise, especially with regard to Hong Kong and the US markets, a Futu consultant said.
Recent IPOs of medicine companies on the Hong Kong stock market have stirred investor sentiment — quotas for IPO loans were snapped up in the blink of an eye.
On the mainland, the virus shock has pushed many people to ponder their wealth management habits and the way forward, instead of merely tightening their belts to survive the economic fallout.
Li Qian, a saleswoman at a State-owned enterprise in Guangzhou, recently took out a 99 yuan online lesson about wealth management, including budget control, asset allocation and basic knowledge of insurance and loans.
It’s the first time she has paid up to gain some knowledge of personal finance. Where did the motivation come from?
“In the past, I would put all my money in the bank and didn’t care much about interest rates, but now, it’s time to take a long hard look at it,” the investing novice said.
The outbreak, Li said, has made her realize that more sources of income have to be explored to cushion the impact of anything untoward in the future, such as losing her job.
She said she wouldn’t expect as large a bonus or commission from her job this year as last, as some enterprises teetered on the brink of collapse because of the pandemic. But even so, she still decided to put 30,000 yuan into a three-year closed-end fund.
According to the latest statistics from China Securities Depository and Clearing Corp, the number of new investors soared to 1.89 million in March — up 111 percent over the previous month and almost matching the 2 million investors recorded a year ago.
Besides the online course, Li followed key opinion leaders and influencers on social network-based trading websites. These platforms allow new investors to copy the portfolio and each investment decision of KOLs, making it much easier for investment decisions to be made.
A growing pool of bloggers in the wealth management sector are emerging on Xiaohongshu — an Instagram-like Chinese fashion and lifestyle-sharing platform — signaling increased interest in it . Earnings from funds or stocks, as well as fundamental investment concepts and tips are posted daily on the platform.
Becky’s Fantasy — an eminent fashion-and-lifestyle WeChat account — published a post of its fans’ wealth management stories in February, attracting over 100,000 views.
“Life is full of uncertainties, and we could never foresee what’s happening next. But what we can do is to try our best to arrange a better living for us and our families,” the influencer wrote.
“The post is timely as my family members are talking about how to make full use of their savings during the long vacation at home,” said one viewer. Another comment that asked Becky’s to post more financial knowledge received more than 700 “likes”.
Last month, Changtou — an online education platform on personal wealth management — released a survey of 3 million users showing that the younger generation, surprisingly, is paying more attention to financial planning.
A stereotype of the generation born after 1990 is that its members are debt-savvy, but actually, 74 percent of them have accumulated their own savings, while 65 percent have formed a long-term investment habit, according to the poll.
Moreover, 23 percent of people born in the new century have started different types of investments using their pocket money.
Besides the rookies in the financial world, experienced investors are re-evaluating their ability to take risks, and fund products are gaining traction.
The sudden pause in normal life turns out to be a chance for Xu Tong, who works for a private fashion company in Shenzhen, to examine and reconsider her family’s overall spending and investing and, more importantly, come up with a better wealth management plan for the future.
“My husband and I aren’t spendthrifts. We’ve kept our lifestyle simple during the public health crisis,” said the 31-year-old mother of a 1-year-old baby.
The couple used to invest in the stock market, but Xu believes they need to add more-stable tools because she can’t afford to make further high-risk investments amid an uncertain future. To her, fund products seem to be an appropriate choice to keep risk to a minimum.
Mainland newspaper China Fund reported that sales of fund products boomed in the first quarter of this year, with one or more new funds snapped up on the first day they were issued each month. So far, above 21 funds have raised more than 5 billion yuan each.
Sales of some popular fund products have gone up fivefold and average sales doubled during a promotion week in February, according to statistics from Alibaba’s financial affiliate, Ant Financial.
