China Investors Collect Stocks Linked to Trade with Russia
A large port in northern China warns that stocks could revalue after Chinese investors raise prices by 94%; Amid widespread speculation that Beijing and Moscow will improve their economic ties. On Tuesday, Jinzhou Port, located northeast of Beijing, stated on the Shanghai Stock Exchange that the company’s stock price has seriously deviated from the fundamentals; Consequently, it is significantly higher than the industry average.
Shares of Jinzhou Port rose to $0.88 from $0.45 on Monday after Russia invaded Ukraine; However, it fell to $0.71 on Wednesday. The rapid achievements of the port area are due to the strict regulations of the Chinese stock market; Which states that regular supply in China is allowed to increase the price only by a maximum of 10% per day.
In a statement on Tuesday, the company said that investors should pay attention to market trading risks and make rational decisions. Dozens of Chinese stocks have shown similarly growing gains in trade-related industries since the invasion of Ukraine.
Meanwhile, Xinjiang Tianshun Supply Chain shares have reportedly almost doubled in price. In January and February, trade between China and Russia increased by 38.5% compared to last year. Trade between the two countries in 2021 amounted to $146 billion.
China and Russia Trade
In early February, both countries pledged to increase their annual bilateral trade value to $250 billion by 2025. China has expressed readiness to help Russia repay tough Western sanctions. It also reaffirmed its strong relationship with the Kremlin. They also lifted restrictions on wheat imports to a neighbor. Russian banks have also entered the Chinese UnionPay payment system; After Visa and Mastercard suspended operations in Russia.
Nevertheless, the explosive growth for companies is mainly due to small investors. About 76% of orders related to trade with Russia on the Shenzhen and Shanghai stock exchanges cost less than $31,692. China’s CSI 300 index fell 7.02% on February 24. From $716.94 on Wednesday morning to $666.60. Analysts say most companies focused on small investors will not reap significant benefits from improved bilateral trade.
In addition, according to the latest data from the World Bank, China’s exports to Russia account for less than 2% of the first annual exports. For comparison, the US accounted for 16.5% of China’s total exports.