Panic on the Chinese stock market – Onet.pl

It all began on 12 June. After a year hurraoptymistycznych increases, which meant that the value of the shares jumped by 150 per cent., Finally came time for correction. However, it is disturbingly deep, already begins to speak to the crash.

already evaporated 3 trillion .

From mid-June to last week’s Shanghai Composite index lost 25 per cent., And the stock exchange They vanished almost $ 3 trillion. The Chinese authorities have felt anxious, because on Sunday announced a special rescue program. Froze m. Al. debuts new companies on the dance floor (so-called. IPO) and formed a rescue fund worth 19 billion dollars., which shed has 21 brokers who have to buy up stocks with the largest market capitalization.

helped only for a moment. On Monday, when stock markets around the world fell with the outcome of the Greek referendum, the Chinese stock market started trading, gaining 7 percent. Madness? Only short-lived. 19 billion. This is nothing compared to the capitalization of the Chinese stock market. Anyway, for now, and so they are not used. Initially worked only psychological factor.

Ultimately, however, the Chinese stock market index every hour began to slide and ended Monday trading on a small, dwuprocentowym black. Tuesday was worse, because it brought dips, but Wednesday a true sale has already started.

This is the panic

On Wednesday, the Chinese stock market started trading 7 percent. declines. Almost half of the companies, because 1300 with 2800 listed on the Chinese Stock Exchange halted trading in its shares. Eventually, the Shanghai Composite index on Wednesday at the end of the day lost nearly 6 percent. (The difference of time zones – ed. Ed.)

– This is wrong and can be even worse. It is possible that trading would return to the level of a year ago, when it began the current bull market – says Michael Every of Rabobank quoted by news agencies.

– Currently on the market there is a panic – even says Zheng Lian of Xinhu Futures Co. in Shanghai. In his view, investors are worried that the collapse of the stock market in China will exert a lot of pressure on the broader financial markets and macroeconomic conditions of the country – he added.

Radio Information Agency reports that according to many economists joint-stock bubble burst in China can be a more serious problem than the crisis in Greece.

Meanwhile, panic swept already well on Hong Kong. The local main Hang Seng stock index also lost nearly 6 percent.

It would be better?

Goldman Sachs beseeches reality. Analysts say the institution that in China there was no speculative bubble, and the largest companies, so-called. blue chips over the next year will gain. Goldman Sachs estimated increase their valuation by 27 percent. Note, however, that Gold Sachs since the outbreak of the global crisis in 2008, enjoys the dubious reputation in recent years been accused of manipulating markets.

Exactly opposite spins forecasts of Bank of America Merrill Lynch. Bank warns that this is not the end of declines. The market will be lost until the communist authorities will not show your strength and will not buy the shares as so-called. “Investor of last resort.”

A and such acts may be ineffective. According to Mark McFarland, chief economist at Coutts & amp; What. in Hong Kong, quoted by Bloomberg Chinese stocks are still too expensive, and the actions the Chinese authorities in the short term will not be effective. – You must reach people’s minds, increase people’s trust. It is a difficult task – says McFarland.

The ban on the sale of shares

And McFarland may be right, because the Chinese authorities have reached for extraordinary measures. On Wednesday, the government ordered the first national companies to buy shares, while supervising the stock market regulator allowed insurance companies to increase the share of equities in their portfolios from 30 to 40 percent. The supervisor went so far as to ensure that the call for shareholders and management companies to buy heavily depreciating stocks. And what? And nothing.

Later that same day, the regulator has tightened the tone and banned the sale of the controlling shareholders of the Company and such, who hold more than 5 percent. shares. The ban is valid for six months. For now.

situations complicated by the fact that eight out of ten investors in the Chinese stock market is not bound to individual investors working with the market. This makes them more susceptible to panic. And less predictable.

While on the Western Front, in the East on the contrary. Temporarily Greece gave a breath markets that are waiting for Sunday, when the summit will be held the last chance. But the baton in scaring investors took over China. The behavior of the Chinese authorities suggests that there is nothing to fear.