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China Daily Website

Shopping frenzy draws eyes of day traders

Updated: 2013-11-12 10:56
By Gao Changxin in Shanghai ( China Daily)

Few know when Nov 11 became the day for China to binge-shop, and fewer still know when day traders started sharing the enthusiasm of shoppers to binge-speculate in the stock market on that day.

But their enthusiasm became overwhelming on Monday during the so-called annual double-11 shopping festival. Stock speculators were busy chasing stocks for profit as "shopaholics" leafed through Web pages for bargains.

While the connection may be somewhat tenuous, stock traders still fall under the general category of "consumer spending". And several key market sectors, including retail, logistics and home appliances, saw increased trading volume and higher volatility.

Joeone Co Ltd, an apparel maker, was up 1.3 percent, or 0.16 yuan ($0.03), to 12.46 yuan. Shanghai Jahwa United Co Ltd, a Shanghai-based maker of cosmetics, increased 1.75 percent to 41.79 yuan.

Though Suning Commerce Group Co Ltd, an online retailer, benefited the most from this year's e-commerce boom, with its share price up close to 62 percent this year, thanks to big institutional investors, the stock dropped 1.87 percent, or 0.2 yuan, on Monday to 10.51 yuan. But the benchmark Shanghai Composite Index was up 0.16 percent to 2,019.47 points on Monday, as the National Bureau of Statistics said over the weekend that the consumer price index rose 3.2 percent year-on-year in October, an eight month high.

China's stock market is known for its speculation and fraud. More than 80 percent of players in the market are individual investors with little market know-how, and they tend to be less rational and more susceptible to false information and market manipulation. "Concept trading" is a technical term used by bigger players to sway smaller players in China, where stocks are traded on news or concepts deemed favorable, though in most cases, they actually are not.

Many speculators push "concepts" such as central government policies and global economic changes. The fact that even events such as the double-11 festival are targeted by traders shows the bulging scale of short-term speculation in China's stock market, said Wang Jianhui, chief economist with Southwest Securities Co Ltd.

Originally, Nov 11 was celebrated as Singles' Day, or Guanggun Jie, a pop culture phenomenon surrounding young Chinese singles. But retailers, especially online ones, have rebranded the day as a shopping festival by offering discounts to spur consumption.

Last Nov 11, 19 billion yuan worth of goods were sold online. This year, the day's sales are expected to top 30 billion yuan. "I don't really know where the festival comes from, but there are a lot of good deals. So I stopped asking questions and started buying," said Li Yun, a 27-year-old saleswoman in Shanghai.

 
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