Market intervention is said to a bad act. But however this has both antagonist as well proponents view over the course.Here I do not want to talk over the course of market intervention. Recently China is facing a clear melt down in their economy due to various reasons. Manufacturing has been in records low and their growth has been recorded below value since 1990's.
China has been intervening the market to stop the market crash slowly through over a year of period and it has been viewed with mixed terms. However most important fact is, whether it may be intervention or any term "Should the government to be allowed to use public money to buy falling starts ?"
It's said to be that Chinese intervene market in early of last year 2015 heavily on march to June has caused the market to blossom and hit the sky with artificially created hype in June to July in 2015. And now it is going down steadily.
2016 year starts with high lost. "does this has the impacts of market intervene during last year which cause the artificial hype in June ?? "
Now Chinese authorities putting restrictions on big shots. Putting restrictions on trades in bigger volumes.
Big players loose money, value in big numbers. But surely the restrictions will give a temporary relief for the devastating market. But for how long ?
What will be the impacts? Does these interventions means that China to be regarded as a good territory for investments ? Who says "yes" Who says "No"
Or China as field of investment or a plain which give a reasonable fair opportunity for investors to secure their investment against big shots. Specially against the Monkey Merchant. (famous monkey theory in Stock Market)
Below is a good article i have read n the bloomberg which capture snapshot of a story of inrvetion with mixed feeling or rather antagonist approach over intervention.
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China moved to support its sinking stock market as state-controlled funds bought equities and the securities regulator signaled a selling ban on major investors will remain beyond this week’s expiration date, according to people familiar with the matter.
Government funds purchased local stocks on Tuesday after a 7 percent tumble in the CSI 300 Index on Monday triggered a market-wide trading halt, said the people, who asked not to be identified because the buying wasn’t publicly disclosed. The China Securities Regulatory Commission asked bourses verbally to tell listed companies that the six-month sales ban on major stockholders will remain valid beyond Jan. 8, the people said.
Chinese policy makers, who took unprecedented measures to prop up stocks during a summer crash, are stepping in once again to combat a rout that erased $590 billion of value in the worst-ever start to a year for the nation’s equity market. While the intervention may ease some selling pressure, it also undermines authorities’ pledge to give markets more sway in the world’s second-largest economy.
“The market has got some help from state funds and that will support shares in the short term,” said Wang Zheng, the Shanghai-based chief investment officer at Jingxi Investment Management Co. “However, in the long run, the market will need its own strength to hold up. It can’t always rely on the national team.”
China’s CSI 300 index rose 0.3 percent at the close, after earlier falling more than 2 percent. The plunge on Monday triggered the nation’s circuit breakers on their first day in effect, dealing a blow to regulatory efforts to calm one of the world’s most volatile bourses. Authorities are trying to prevent market turmoil from eroding confidence in an economy set to grow at its weakest annual pace since 1990.
The sales ban on major holders, introduced in July near the height of a $5 trillion rout, will stay in effect until the introduction of a new rule restricting sales, the people said. Listed companies were encouraged to issue statements saying they’re willing to halt such sales, they said.
Several firms did so this week. The controlling holder of Shenzhen-listed Zhejiang Century Huatong Group said in an exchange filing it wouldn’t sell shares on the secondary market for another year after its previous commitment expires in January. Changshu Tianyin Electromechanical Co., a maker of refrigerator-compressor parts, said its controlling holders won’t pare holdings over the next nine months.
International Concern
The regulatory ban, announced on July 8, applied to investors with holdings exceeding 5 percent in a single stock, along with corporate executives and directors. The restriction drew criticism at the time from foreign investors including Templeton Emerging Markets Group and UBS Wealth Management, who saw the intervention as a step too far. Goldman Sachs Group Inc. estimated the ban kept $185 billion of shares off the market.
An extension would come as a surprise to many investors. All seven strategists and fund managers surveyed by Bloomberg at the end of last month said they expected regulators to let the ban lapse this week.
“We don’t really like market intervention,” Stephen Ma, a senior portfolio manager at LGM Investments Ltd., whose parent oversees more than $254 billion. “The government should have learned their lesson last summer.”
Chinese policy makers used purchases by government-linked funds to prop up shares as the CSI 300 plunged as much as 43 percent over the summer. State funds probably spent $236 billion on equities in the three months through August, according to Goldman Sachs. The CSRC didn’t immediately respond to a faxed request for comment.
China has been intervening the market to stop the market crash slowly through over a year of period and it has been viewed with mixed terms. However most important fact is, whether it may be intervention or any term "Should the government to be allowed to use public money to buy falling starts ?"
It's said to be that Chinese intervene market in early of last year 2015 heavily on march to June has caused the market to blossom and hit the sky with artificially created hype in June to July in 2015. And now it is going down steadily.
2016 year starts with high lost. "does this has the impacts of market intervene during last year which cause the artificial hype in June ?? "
Now Chinese authorities putting restrictions on big shots. Putting restrictions on trades in bigger volumes.
Big players loose money, value in big numbers. But surely the restrictions will give a temporary relief for the devastating market. But for how long ?
What will be the impacts? Does these interventions means that China to be regarded as a good territory for investments ? Who says "yes" Who says "No"
Or China as field of investment or a plain which give a reasonable fair opportunity for investors to secure their investment against big shots. Specially against the Monkey Merchant. (famous monkey theory in Stock Market)
Below is a good article i have read n the bloomberg which capture snapshot of a story of inrvetion with mixed feeling or rather antagonist approach over intervention.
====================================================================
- State funds buy after CSI 300 index tumbled 7% on Monday
- CSRC signals six-month selling ban on major holders to stay
China moved to support its sinking stock market as state-controlled funds bought equities and the securities regulator signaled a selling ban on major investors will remain beyond this week’s expiration date, according to people familiar with the matter.
Government funds purchased local stocks on Tuesday after a 7 percent tumble in the CSI 300 Index on Monday triggered a market-wide trading halt, said the people, who asked not to be identified because the buying wasn’t publicly disclosed. The China Securities Regulatory Commission asked bourses verbally to tell listed companies that the six-month sales ban on major stockholders will remain valid beyond Jan. 8, the people said.
Chinese policy makers, who took unprecedented measures to prop up stocks during a summer crash, are stepping in once again to combat a rout that erased $590 billion of value in the worst-ever start to a year for the nation’s equity market. While the intervention may ease some selling pressure, it also undermines authorities’ pledge to give markets more sway in the world’s second-largest economy.
“The market has got some help from state funds and that will support shares in the short term,” said Wang Zheng, the Shanghai-based chief investment officer at Jingxi Investment Management Co. “However, in the long run, the market will need its own strength to hold up. It can’t always rely on the national team.”
China’s CSI 300 index rose 0.3 percent at the close, after earlier falling more than 2 percent. The plunge on Monday triggered the nation’s circuit breakers on their first day in effect, dealing a blow to regulatory efforts to calm one of the world’s most volatile bourses. Authorities are trying to prevent market turmoil from eroding confidence in an economy set to grow at its weakest annual pace since 1990.
The sales ban on major holders, introduced in July near the height of a $5 trillion rout, will stay in effect until the introduction of a new rule restricting sales, the people said. Listed companies were encouraged to issue statements saying they’re willing to halt such sales, they said.
Several firms did so this week. The controlling holder of Shenzhen-listed Zhejiang Century Huatong Group said in an exchange filing it wouldn’t sell shares on the secondary market for another year after its previous commitment expires in January. Changshu Tianyin Electromechanical Co., a maker of refrigerator-compressor parts, said its controlling holders won’t pare holdings over the next nine months.
International Concern
The regulatory ban, announced on July 8, applied to investors with holdings exceeding 5 percent in a single stock, along with corporate executives and directors. The restriction drew criticism at the time from foreign investors including Templeton Emerging Markets Group and UBS Wealth Management, who saw the intervention as a step too far. Goldman Sachs Group Inc. estimated the ban kept $185 billion of shares off the market.
An extension would come as a surprise to many investors. All seven strategists and fund managers surveyed by Bloomberg at the end of last month said they expected regulators to let the ban lapse this week.
“We don’t really like market intervention,” Stephen Ma, a senior portfolio manager at LGM Investments Ltd., whose parent oversees more than $254 billion. “The government should have learned their lesson last summer.”
Chinese policy makers used purchases by government-linked funds to prop up shares as the CSI 300 plunged as much as 43 percent over the summer. State funds probably spent $236 billion on equities in the three months through August, according to Goldman Sachs. The CSRC didn’t immediately respond to a faxed request for comment.
