Retail Investor yet to Cheer Up

Jul 26-2019   

The latest China Investors Sentiment Index, co-developed by NSD, showed that in June Chinese stock market retail investors were 18.9% less active than the previous month, prolonging a continuous slide.

Consisting of two main indices, CISI is a new tool to reflect retail investors’ mood by using deep learning to analyze online financial data. The Attention Index measures the activeness of investors, while the Sentiment Index pinpoints their mood on a scale of 0-100, from utter pessimism to utter optimism.

Since touching a high point in April, the Attention Index has been skidding for two months in a row. That Shanghai Composite Index languished in the 2,900-3,000 range seemed to have whittled away the patience of investors.

The Sentiment Index had a reading of 42.6, 2.7% higher than the previous month. Despite the uptick, the investors were still on the pessimistic side of the scale. Major events in that month, including the Fed’s widely expected interest trimming, the ECB’s quantitative signals, and the meetings and decisions by the US and the Chinese government to resume trade talks, spurred stock markets worldwide. However, domestic economic data released by the National Bureau of Statistics still pointed to downward pressures.

Industries fared differently according to sub-indices. Leisure entertainment, food and beverage, finance, public utility and construction materials were the five industries enjoying investors’ highest optimism (though none surpassing the 50 reading. i.e. neural sentiment). The lowest-spirit ones were chemicals, agriculture, telecom, electric appliance, and national defense and arms.