Eliza Wong
A-Share Market Revival in Full Swing
The heartbeat of China’s stock market just quickened significantly. Exchange data released July 2 revealed 1.65 million new A-share accounts opened in June – marking 6% growth from May and capping a remarkable first-half total of 12.6 million new investors entering the market. This torrent of new participation represents a powerful 32.77% year-on-year surge compared to the 9.49 million accounts opened during the same period in 2024. Such vigorous expansion provides concrete evidence that after years of cautious sentiment, both retail and institutional investors are flooding back into Chinese equities with renewed confidence.
Monthly Surge Patterns Revealed
The unfolding story throughout early 2025 exhibits distinct waves of investor enthusiasm:
Six-Month Breakdown
– January: 1.57 million accounts (steady start)
– February: 2.84 million accounts (near doubling from January)
– March: 3.065 million accounts (H1 peak)
– April: 1.92 million accounts (initial cooling)
– May: 1.56 million accounts (stabilization phase)
– June: 1.65 million accounts (rebound momentum)
Historic Comparisons
The June figure dramatically exceeded the 1.076 million accounts opened in June 2024 by 53.35%, showcasing amplified momentum. Notably, March’s blistering 3.065 million monthly openings marked the second highest ever recorded, surpassed only by October 2024’s historic 6.84 million during the massive 9/24 rally.
Trading Metrics Confirm Resurgence
Complementing the account surge, key liquidity indicators reveal intensified market activity:
Transaction Volume & Financing
– Average daily trading value reached ¥1.39 trillion in H1 – up 61% year-on-year
– Margin financing balances climbed to ¥1.85 trillion by June’s close – a significant 25% YoY gain
– Surging trading commissions boosted brokerage revenues immediately
Primary Market Accelerates
The IPO pipeline roared back to life with dramatic results:
– Total equity fundraising reached ¥761 billion – staggering 400% YoY growth
– 51 IPOs launched (7 more than H1 2024) raising ¥37.4 billion
– Secondary offerings dominated with ¥696 billion raised – sevenfold growth YoY
Brokerages Poised for Stellar Earnings
This explosive growth translates directly to securities firms’ bottom lines, as PingAn Securities non-bank chief analyst Wang Weiyi (王维逸) confirms:
Benefiting from market recovery and activity waves, most listed brokers show remarkable year-on-year improvement. Many enhanced directional investment positioning, generating substantial gains.
Q1 Foundations Were Strong
Early signals already appeared promising:
– Listed brokerages generated ¥125.9 billion revenue (24.6% YoY growth)
– Net profits reached ¥52.18 billion (83.48% YoY surge)
– Trading commissions and proprietary trading drove most gains
Half-Year Forecasts Turn Bullish
Kaiyuan Securities analyst Gao Chao (高超) projects momentum will accelerate:
We expect listed brokers to maintain high growth, forecasting H1 profit expansion around 50% after adjusting for extraordinary factors.
Guangfa Securities Chen Fu (陈福) points to structural advantages:
Market activity significantly outpaced last year with clear refinancing rebound. Top brokers control over 90% IPO underwriting share – they’re poised to capture disproportionate benefits.
Navigating the Momentum Shift
Several catalysts converged to spark this dramatic renewal:
– Monetary stimulus creating yield-seeking capital floods
– State-backed market reform pledges reassuring foreign investors
– Valuation gaps versus global peers attracting capital
– Improved sentiment following property sector stabilization
The account surge particularly revealed strengthened retail confidence. Of June’s 1.65 million accounts, 1.638 million belonged to individual investors – just 8,400 were institutional. This overwhelmingly dominant retail influx signals exceptionally broad participation.
Sustainability Signals Emerge
While acknowledging market volatility, three trends suggest durability:
Deepening Market Reforms
The CSRC’s listing rule modifications and tightened delisting requirements enhance market quality – welcoming more capital.
Income Diversification Push
With property investment cooling, Chinese households allocated ¥1.2 trillion to funds/stocks in Q1 alone – redirecting national savings toward equities.
Global Allocation Shifts
International funds increased China holdings by $12 billion in Q2 (Morgan Stanley data) – many citing discounted valuations.
Capitalizing on the Investment Wave
For observers monitoring China’s financial evolution, this resurgence demands attention:
– Brokerage stocks exhibit strongest market-sensitive leverage
– Retail-focused fintech platforms gain user/subscriber advantages
– Market infrastructure providers witness surging transaction volumes
– Asset managers benefit from accelerating fund inflows
The sheer scale of this A-share account surge – 12.6 million new investors propelling growth – creates profound momentum shifts across China’s capital ecosystem. While inevitable fluctuations will occur, current indicators suggest the retail revival possesses structural foundations extending beyond frenetic speculation. Brokerages entering earnings season clearly stand as near-term beneficiaries, but longer term, China’s entire capital allocation system may emerge deepened and strengthened by this watershed moment.
Positioning in New Market Conditions
As investor ranks swell and trading floors regain commotion, strategies should prioritize:
– Brokerages with strong retail networks (Interactive broker comparison)
– Companies exhibiting robust dividend policies appealing to newcomers
– Fintech innovators democratizing market access via mobile apps
– Sectors benefiting simultaneously from policy support and liquidity waves
Don’t merely watch this historic participation surge unfold – actively evaluate which segments will sustainably convert new enthusiasm into economic value. A-shares display compelling evidence that patient capital dedicated toward China’s market maturation now enters its most promising chapter in years.
