Blockchain fever heats up; major indexes rise

By Reuters - Global Times Source:Reuters-Global Times Published: 2018/1/14 17:23:40

China's major stock indexes closed higher for the 11th straight day on Friday, with blockchain-related companies extending their bullishness on the same day, as punters brushed aside concerns raised by regulators about the rationality of stock price surges last week.

China's benchmark Shanghai Composite Index rose for the 11th straight trading day Friday, closing 0.1 percent higher at 3,428.94 points, while the Shenzhen Component Index closed 0.02 percent lower at 11,461.99 points.

Client Service International Inc jumped the maximum 10 percent for the third straight day, although the software maker flagged risks to investors, saying it was still "exploring" blockchain technology.

Stock punters also pushed up other blockchain concept stocks such as Xiamen Anne, Brilliance Technology and Shenzhen Zqgame.

Most of these companies had seen their shares fall steadily since mid-2015 to multi-year lows before this week's blockchain-triggered spurt.

A growing number of firms - ranging from packaging firms to gaming companies - have publicly linked their businesses with blockchain to capitalize on rapidly growing global investor interest for the technology, the backbone of Bitcoin, and other digital currencies.

Chinese regulators are taking unprecedented steps to contain financial risks - Beijing has banned initial coin offerings, shut down local cryptocurrency trading exchanges and limited Bitcoin mining - but speculators have not been deterred.

"It takes only five minutes to think of an idea that has something to do with blockchain. But it's a totally different story to build a business model around it that makes money," said retail investor Wu Beicheng, adding he identified only one China-listed company, Hundsun Technologies, as a reasonable bet.

Robin Zhang, compliance manager at asset manager Soochow Securities CSSD, put China's blockchain mania in the backdrop of a global setting, where firms including Eastman Kodak have attracted investor fever due to their applications of the technology. "It's a bit like the dot.com bubble. But after the bubble burst, some companies with real customers, revenues and performance will stand out, like Google or Alibaba."

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