'There is market support practiced by most countries financial authorities, usually with things such as circuit breakers, etc... but what the Chinese authorities have been doing is tantamount to meddling, acts of desperation, runs afoul of free market principles or proper capitalism.
Here are the things China has done for the past 10 days to stop the sell down:
1) drop interest rates by 75 basis points
2) ban IPOs
3) ask state own firms not to sell shares
4) ask securities firms to buy shares (this one is so puzzling)
5) allow companies who wish to suspend their own shares, for basically any reason ... now its close to 50% of all listed companies in China having requested and being suspended from trading
6) restricted short bets on index futures
as if thats not enough, today they announce that anyone holding at least 5% shares in any listed company CANNOT sell their shares for 6 months.
BUT ... wait for it ... this one takes the cake ..."Under new rules announced last week by the country’s securities regulator, real estate has become an acceptable form of collateral for Chinese margin traders, who borrow money from securities firms to amplify their wagers on equities. That means if share prices fall enough, individual investors who pledge their homes could be at risk of losing them to a broker." To allow punters to literally bet the house on it ... soon securities firms will be the biggest house owners!!!'
More:
http://malaysiafinance.blogspot.com/2015/07/chinas-baby-steps-into-capitalism.html
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Here are the things China has done for the past 10 days to stop the sell down:
1) drop interest rates by 75 basis points
2) ban IPOs
3) ask state own firms not to sell shares
4) ask securities firms to buy shares (this one is so puzzling)
5) allow companies who wish to suspend their own shares, for basically any reason ... now its close to 50% of all listed companies in China having requested and being suspended from trading
6) restricted short bets on index futures
as if thats not enough, today they announce that anyone holding at least 5% shares in any listed company CANNOT sell their shares for 6 months.
BUT ... wait for it ... this one takes the cake ..."Under new rules announced last week by the country’s securities regulator, real estate has become an acceptable form of collateral for Chinese margin traders, who borrow money from securities firms to amplify their wagers on equities. That means if share prices fall enough, individual investors who pledge their homes could be at risk of losing them to a broker." To allow punters to literally bet the house on it ... soon securities firms will be the biggest house owners!!!'
More:
http://malaysiafinance.blogspot.com/2015/07/chinas-baby-steps-into-capitalism.html
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