Chinese Stock Market

[Kaere]

Sooo... if we're going to discuss world economies...



http://www.bbc.com/news/business-33438416?ocid=socialflow_facebook

Excerpt:

China's regulators are taking fresh steps to try to quell volatility in the country's financial markets.

Investors holding stakes of more than 5% are not allowed to sell shares in the next six months.

The new rule from the country's securities regulator is intended to relieve pressure on the stock market.

Despite efforts to stem the losses, the dramatic sell-off in China's main stock market continued on Wednesday, with the Shanghai Composite plunging 6.8%.

That took share values nearly 30% below their June peak.

On Wednesday, another 500 listed firms said they would stop trading their shares in an effort to insulate themselves from the meltdown.

Around 1,300 firms have halted trading, almost half of China's main shares.

IG chief market strategist Chris Weston dubbed the sell-off "Black Wednesday".

"For the first time, The China Insurance Regulatory Commission (CIRC) has admitted there is genuine 'panic selling' underway.

"When we see around 90% of the market suspended or falling by their daily limit (while further measures have been taken to limit the influence seemingly exerted by futures traders) you know things are becoming less rational," he said.


Chinese stock market losses:

30% fall in Chinese share prices since mid-June

$3 trillion wiped off value of companies

1,301 companies halted trading, that's more than 40% of the market

90m people in China affected - mostly small retail investors

150% how far shares had risen between June 2014 and June 2015

[Kaere]

http://www.telegraph.co.uk/finance/china-business/11725236/The-really-worrying-financial-crisis-is-happening-in-China-not-Greece.html

Excerpt:

While all Western eyes remain firmly focused on Greece, a potentially much more significant financial crisis is developing on the other side of world. In some quarters, it’s already being called China’s 1929 – the year of the most infamous stock market crash in history and the start of the economic catastrophe of the Great Depression.

In any normal summer, a 30pc fall in the Chinese stock market – a loss of value roughly equivalent to the UK’s entire economic output last year – after an ascent which had seen share prices more than double within the space of a year would have been front page news across the globe.

The dramatic series of government interventions to stem the panic – hitherto unsuccessful, it should be added – would similarly have been up there at the top of the news agenda. Yet the pantomime of the Greek debt talks, together with the tragi-comedy of will they, won’t they leave the euro, has relegated the story to little more than a footnote - even though 940 companies, more than a third, have now suspended trading on China’s two main indices.

"America in 1929 and China today – are at roughly similar stages of economic development"

The parallels with 1929 are, on the face of it, uncanny. After more than a decade of frantic growth, extraordinary wealth creation and excess, both economies – America in 1929 and China today – are at roughly similar stages of economic development. Both these booms, moreover, are in part explained by extremely rapid credit growth. Indeed, China’s credit boom dwarfs that of even the “roaring Twenties”. Borrowed money, or margin investing, played a major role in both these outbreaks of speculative excess.

[Rogue]

This is quite 'correction'! The parallels are interesting.

[Lenzabi]

Chinese government let a bubble happen, a bad one, then they helped make it worse, and are tossing the kerosene on the flames

[Rockhopper]

The Hang Seng lost 800 points in an hour (8%)! If the Chinese Govt. can't contain it there is going to be some serious consequences.

Tim.

[Sponsored content]