Chart of the Day: New Investor Sign-Ups Surge

After months of lackluster business, China’s brokerages have seen a surge in new customers looking to invest in the country’s rebounding stock markets.

From Feb. 18 to Friday, the number of newly registered investors jumped 53% from the previous trading week to more than 310,000, the highest weekly figure in 10 months, according to official data. Notably, all but a sliver of the new sign-ups — 99.87% — were individual investors, according to China Securities Depository and Clearing Corp. Ltd.

After spending 2018 as one of the world’s worst performing stock markets, Chinese mainland shares entered a bull market this week after the benchmark index rocketed 5.6% on Monday. As of Wednesday, the benchmark Shanghai Composite Index has surged 20.3% this year, climbing above 2,950. The smaller Shenzhen Component Index is up 24.6% this year.

Market momentum is running high as the combined daily trading volumes of the two exchanges exceeded 1 trillion yuan ($149.4 billion) on both Monday and Tuesday. The last time the volume surpassed 1 trillion yuan was Nov. 27, 2015, according to official data.

As individual investors rush into the roaring markets, some analysts are worried that the spike in stock prices has been spurred more by speculation than improving fundementals. The country’s securities watchdog issued a notice on Monday warning about a surge in unregulated margin trading, in which investors use borrowed funds from unregulated channels to buy stocks.

Contact reporter Charlotte Yang (yutingyang@caixin.com)