China’s Stock Market Boom: How 1.65 Million New Accounts Fueled a 53% June Surge

Surging Investor Confidence Reshapes A-Share Market Landscape

The Shanghai and Shenzhen exchanges witnessed an extraordinary revival in June 2025, attracting 1.65 million new trading accounts – an astonishing 53% surge compared to June 2024. This acceleration proved the resilience of China’s equities market amid global uncertainty, reversing April-May declines triggered by tariff tensions. Behind this renewed influx lies a potent combination of rebounding market profitability and strategic policy pivots that restored faith among retail and institutional investors alike.

June’s rally cemented broader first-half gains: Between January and June 2025, Chinese securities firms opened 12.60 million new accounts – eclipsing the 9.49 million accounts created during 2024’s equivalent period by a robust 32.79% margin. Market analysts cite this momentum as validation that emotive factors governing investment decisions underwent crucial positive shifts:

• Major indices soared throughout June: Shanghai Composite gained 2.9% (breaking 3,450), Shenzhen Component jumped 4.23%, and ChiNext surged 8.02%
• Trading volume exploded to 26.72 trillion yuan ($3.7 trillion), with daily averages hitting 1.3 trillion yuan (79.57% year-over-year spike)
• Policy reforms announced at Shanghai’s Lujiazui Forum unlocked institutional participation

June Performance: Anatomy of a Market Revival

The 1.65 million new accounts represent more than raw statistics – they symbolize critical behavioral turning points measured across three dimensions:

Year-over-Year Momentum

Beyond the sensational 53% growth against June 2024’s 1.08 million openings, June’s figures surpassed six months of 2024’s results including February (1.30 million), May (1.27 million), and August (1.00 million). Importantly, monthly volatility moderated despite external pressures, revealing deepening market stability.

Sequential Growth Pattern

The market’s sequential path from January underscores its appetite recovery:

1. January: 1.57 million accounts (steady opening with Lunar New Year adjustments)
2. February: 2.84 million (98% monthly leap)
3. March: 3.07 million peak (96% above January)
4. April: 1.92 million (37.22% decline amid U.S. tariff fears)
5. May: 1.56 million (19.17% MoM contraction)
6. June: 1.65 million (5.84% rebound confirming recovery)

The Core Catalyst: Money-Making Effect’s Powerful Return

The critical psychological force driving investor behavior – dubbed ‘money-making effect’ – catalysed June’s revival through tangible profitability:

Hong Kong Securities analysts noted: ‘Simultaneous index surges demonstrated palpable yield opportunities unseen since 2024’s tech rally.’ Historically measurable through equity returns relative to alternatives like bank deposits, this effect swung sharply positive during June:

• SME-heavy ChiNext surged 8.02%, outperforming Shanghai Blue Chips
• Financial sector domination lifted Shanghai Composite via approved virtual asset trading licenses
• International funds pivoted from volatile U.S. markets toward yuan-denominated ‘safe havens’

Quantifying the Profitability Shift

China’s Securities Depository and Clearing Corporation (中国证券登记结算有限责任公司) reported enhanced portfolio coverage positioning scientists among sectors such as green tech and semiconductors gained upwards of 15%. Simultaneously:

• Individual profit realization accelerated as IPO gains materialized
• Margin account activity expanded 12% despite regulatory appeal
• Cumulative small-investor returns averaged 6-9% against China’s 1.75% benchmark rates

Policy Engine: Reform Imperatives Driving Confidence

Beyond organic momentum, China Securities Regulatory Commission (CSRC)’s decisive interventions transformed prospects during their June Shanghai summit – the Lujiazui Forum:

Eight Financial Opening Initiatives

Targeting Shanghai’s transformation into an international financial nexus, these measures simplified access for QFII investors while accelerating derivatives approvals. Specifics included:

• Foreign derivative trading quotas raised 300% through simplified filings
• Cross-border asset management guidelines easing fund repatriation
• Insurance joint ventures eligibility expanded for European firms

1+6 Structural Reform Package

This cornerstone policy integrated mainland regulatory oversight with Hong Kong SAR capabilities:

1. Virtual asset licensing frameworks benefiting brokers including Guotai Junan International
2. Innovation board financing thresholds revised for AI and semiconductor startups
3. Expanded investor protections through dispute resolution mechanisms

Yillion Bank economist comments via Bloomberg: ‘Virtual asset permissions shifted market calculus overnight – suddenly brokers weren’t merely facilitators but ecosystem gatekeepers.’

Half-Year Triumph: Setting Foundation for Sustained Growth

The first-half accumulation of 12.60 million accounts builds critical mass for third-quarter momentum:

Index Foundations Solidify

Half-year closing indices underscored broad-based strength:

• Shanghai Composite: +2.76%
• Shenzhen Component: +0.48%
• ChiNext: +0.53%
• Star 50 Index: Astronomical +39.45% leap

Trading Volume Amplification Signals Engagement

A-share markets traded 13 trillion shares worth 162.66 trillion yuan during H1 – both metrics surging (37.64% and 59.9% YoY respectively). Such activity validated:

• Deepened secondary market participation
• Rediscovered international ownership through Stock Connect inflows
• Structural moves toward balanced sector representation

Brokerage Forecasts: Bullish Second-Half Projections

Leading securities houses synthesized H1 insights into unanimously optimistic outlooks:

China Merchants Securities: Entering Bull Phase Two

‘Marginal GDP accelerations signal demand stabilization after three-year declines,’ stated head researcher Zheng Xiaoqiang. Their modelling anticipates:

• Sectoral revaluations as high-yield capacities normalize
• $42bn+ incremental domestic fund flows boosted by pension reforms
• Bull market maturation toward blue-chip rotation cycles

Source: China Merchants H2 Strategy Report

CSC Financial: Ascending Trajectory Despite Volatility

CSC economists highlighted dollar weakness strengthening yuan assets alongside policy consistency:

• Predict initial H2 consolidation prior to 8.8% year-end leaps
• Candidates for upward catalysts: Domestic NFT regulatory clarity and robotics subsidies
• Deterministic monetary flows westward supporting A-share premiums

Dongxing Securities: Structural Slow Bull Confirmation

Crossing Shanghai Composite’s 3400 threshold triggered technical buy signals cementing:

• Sustained volume-backed advances
• Sector rotation creating durable momentum waves
• Retreats contained below 3200 forming reliable entry corridors

Guotai Haitong: Innovation Themes Take Center Stage

‘After financial stocks ignite the rally, thematic innovators fly highest,’ advised research chief Hao Mingtao:

• Robotics, biotech, and next-gen consumer tech targeted growth vectors
• Capital-weighted indices secondary to innovation acceleration
• H2 profitability potentially doubling March-June yields via selective exposure

Navigating Market Shifts With Calculated Precision

The extraordinary growth witnessed in June’s 1.65 million new accounts affirms how profoundly market profitability drives participation – precisely the money-making effect brokers optimize. While tariff disputes caused palpable April wobbles, reformed institutions responded decisively through licensing liberalisations and Shanghai-centric innovations.

Bullish broker consensus emphatically validates unfinished momentum:

• CSC Financial’s mid-year outlook expects Shanghai Composite surpassing 3,800
• Guotai Haitong specialists highlight autonomous vehicle supply-chain equities
• Retail opportunity costs improved versus fixed-deposit ecosystems

China’s securities evolution enters next-phase maturation: diverse sophistication replacing homogeneity – whether through internationalized products or SME empowerment. For prospective entrants evaluating timing: volatility channels stay navigable while underlying directional currents strengthen. Access brokerage-financed digital education portals before initiating positions during August consolidation windows. Financial literacy precedes prosperity: Register with CSRC-accredited advisors via platforms like East Money Info to decode signals invisible elsewhere.