Chinese Stock Markets Are in the Middle of an ‘Unprecedented’ Slide

[Star Wars]

Exchange denies rumor that Goldman Sachs is shorting China's stock market| Reuters

China's Financial Futures Exchange on Wednesday squashed rumors that foreign investors including Goldman Sachs have been shorting Chinese stocks using index futures, the latest move by regulators to calm market anxiety following two weeks of panic selling.

The deep correction in China stocks, which knocked main indexes down over 20 percent in just a fortnight, has sparked conspiracy theories involving foreign speculators.

Rumors have been swirling lately that overseas institutions including Goldman and the Hong Kong unit of China Southern Asset Management Co have been shorting China's index futures.

The Financial Futures Exchange, which hosts China's stock index futures, said on Wednesday that the 63 overseas institutions that currently trade index futures in China, including Goldman, can only trade for risk-hedging purposes.

China Southern hasn't even opened an account at the exchange, the exchange said.

"These institutions' risk-hedging using index futures conform to relevant rules, and there's no such thing as massive shorting," it said in its official microblog.

The exchange said it would ask regulators to punish those who spread rumors that threaten to seriously disrupt market order.

Goldman declined to comment on the rumour. China Southern's Hong Kong unit couldn't be immediately reached for comment as Wednesday is a public holiday in the city. (Reporting by Samuel Shen and Nathaniel Taplin; Editing by Shri Navaratnam)

 

[VeeraBahadur]

Does Chinese stock exchange operate on weekends ??

 

[Götterdämmerung]

The question is: who got the USD 3.7 trillion?

 

[Aepsilons]

This is.... Bad.

 

[NiceGuy]

Exchange denies rumor that Goldman Sachs is shorting China's stock market| Reuters

China's Financial Futures Exchange on Wednesday squashed rumors that foreign investors including Goldman Sachs have been shorting Chinese stocks using index futures, the latest move by regulators to calm market anxiety following two weeks of panic selling.

The deep correction in China stocks, which knocked main indexes down over 20 percent in just a fortnight, has sparked conspiracy theories involving foreign speculators.

Rumors have been swirling lately that overseas institutions including Goldman and the Hong Kong unit of China Southern Asset Management Co have been shorting China's index futures.

The Financial Futures Exchange, which hosts China's stock index futures, said on Wednesday that the 63 overseas institutions that currently trade index futures in China, including Goldman, can only trade for risk-hedging purposes.

China Southern hasn't even opened an account at the exchange, the exchange said.

"These institutions' risk-hedging using index futures conform to relevant rules, and there's no such thing as massive shorting," it said in its official microblog.

The exchange said it would ask regulators to punish those who spread rumors that threaten to seriously disrupt market order.

Goldman declined to comment on the rumour. China Southern's Hong Kong unit couldn't be immediately reached for comment as Wednesday is a public holiday in the city. (Reporting by Samuel Shen and Nathaniel Taplin; Editing by Shri Navaratnam)

Goldman did Nothing . CN just shoot himself in the foot when begging for US money since 1979 instead of trying to make money himself.

US can raise CN, then US can take CN down by the TPP deal, too.

 

[ito]

The question is: who got the USD 3.7 trillion?

Nobody got USD 3.7 trillion. That was the amount of over valuation of the stock market as thought by the investors as of today.

 

[Shoonya]

This is.... Bad.

Why ? This is a healthy correction.Chinese Index went up to 5200 from 2000 in 10 months even if it retraces to a level of 2200 even then it will have an annual growth rate of 10 percent, which is more than the Chinese growth rate.

 

[Edison Chen]

Nobody got USD 3.7 trillion. That was the amount of over valuation of the stock market as thought by the investors as of today.

Correct.

 

[Aepsilons]

Why ? This is a healthy correction.Chinese Index went up to 5200 from 2000 in 10 months even if it retraces to a level of 2200 even then it will have an annual growth rate of 10 percent, which is more than the Chinese growth rate.

It is a prognostic factor, and for us who have investments in China, is quite worrisome. I do know about the Index fluctuations, but the issue that I'm concerned about is the internal aspect and the policies that the Central Bank has tried to implement, yet have failed to properly manage. The four interest-rate cuts and other monetary easing, however, haven’t done enough to lower borrowing costs, especially because the economy faces increased deflationary pressure. Another issue that I'm concerned about (as one who has invested in Chinese stocks....) is the fact that in China, specially the manufacturing sector, there has been a recent trend in job shedding and its a lot worse than back in 2009 and that may put a damp on manufacturing output. There are just a lot of factors to consider right now.

And the loss of $3.7 Trillion is not a good sign at all for us.

 

[+4vsgorillas-Apebane]

It went up 140 percent over 12 months.....

This is just a correction, albeit a small one. Too many speculative fcukers buying equities for quick capital gains but now brought back down to earth.

Honest people make money by work, not speculating and riding the machinations of the financial world.

If you have money, buy a house or 2. A house with land. Its the one thing they are not making more of these days.

 

[Aepsilons]

Honest people make money by work, not speculating and riding the machinations of the financial world.

But, friend, that's the way stock market works....the trick is selling at the right time.

If you have money, buy a house or 2. A house with land. Its the one thing they are not making more of these days.

In fact, that's how i made a lot of my money in stocks --- was in the development markets in China. Its about selling at the right time. Made a lot of money that way.

 

[Matrixx]

It went up 140 percent over 12 months.....

This is just a correction, albeit a small one. Too many speculative fcukers buying equities for quick capital gains but now brought back down to earth.

Honest people make money by work, not speculating and riding the machinations of the financial world.

If you have money, buy a house or 2. A house with land. Its the one thing they are not making more of these days.

but loosing 30% in week is worrisome....

 

[+4vsgorillas-Apebane]

But, friend, that's the way stock market works....the trick is selling at the right time.

True.

My bro has a portfolio and he stares at a screen all day while doing little other work. On another tab on his laptop is the page for betfair Australia.

In the end its just gambling and its unfortunate that a lot of the wealth in the world is derived from numbers on a computer screen.

 

[black-hawk_101]

Panic sets in as Shanghai Composite drops 30pc, $3.7 trillion wiped of China share market despite crackdown
PM
By business reporter Sue Lannin
Updated yesterday at 2:46pm



It plunged by nearly 6 per cent on Friday in another volatile day of trade.

But AMP Capital chief economist Shane Oliver is optimistic and described it as correction, not a crash.

"We've already had quite a sharp fall, I don't think we'll see a crash in the Chinese share market," Mr Oliver told PM.

"It's not dramatically overvalued.

"What I think we are seeing here is a correction.

"It rose too far too fast over the last 12 months, up 140 per cent, just went up there too quickly."

'The stock market can go lower'
Chinese regulators are investigating market manipulation and short selling, when investors borrow shares to sell in the hope of buying them back at a profit.

They have also said they will protect investors against what they call sales violations on investment products.

This week, regulators relaxed restrictions on margin lending and cut interest rates to try and stop the share market decline.

I don't think its a risk to the Chinese financial system... It is securities firms who are dominant in the margin lending sphere

Westpac senior international economist Huw McKay


Chris Weston, the head of research at IG Markets, said efforts by Chinese authorities to stem the falls have not worked so far.

"We're even hearing now that they are allowing people to use housing as collateral for financing, so you can really bet your house on the stock market, which sounds like it could end very much in tears," he said.

"I think what we seeing now is a major deleveraging going through.

"The stock market for me looks like it can go lower."

The big rise on Chinese share markets over the past year has been driven by the popularity of margin loans in China, loans taken out by investors to buy shares, a move encouraged by the Chinese government to develop equity markets.

Some estimates put the value of margin loans at as much as $US645 billion.

Traders are now calling in some of those loans because of fears that stocks are overvalued.

But Huw McKay, senior international economist at Westpac, does not think it is a threat to the Chinese financial system because most margin lending is done by the private sector.

"I don't think its a risk to the Chinese financial system," he said.

"It is securities firms who are dominant in the margin lending sphere.

"The core of the banking system is relatively untouched here."

Panic sets in as Shanghai Composite drops 30pc, $3.7 trillion wiped of China share market despite crackdown - ABC News (Australian Broadcasting Corporation)

The labor cost in China is more than what is there in India and now many problems have come up in China which includes Xinjiang, Hong Kong and other ethinic problems due to weak internal economy.

China has been producing low cost very low quality products which has destroyed the world economies specially those in the North America and EU. Still, US technocrats have hinted that they had a card to play which is to use new Nano tech based industries to wipe out China. On this nano tech both North America and EU are working and have made good progress. I am sure that in 2 years time North America and EU will again be a super power with China and Russia being split in many parts again.

Would love to see Siberia as a country of Santa and Snow White

I think Pakistan should not fear about the $45 Billion investment as the local investor is much more strong and reliable.

 

[Echo_419]

Correct.

Any Chinese members here whongot their hands burned