June 30, 2015 at 18:45China may introduce a temporary ban on the initial public offering (IPO)
The Chinese stock market, which experienced a shocking correction last week, continues to be in a fever.
Following yesterday's trading results, the Shanghai Composite index fell 3.3%, although during the trading session it fell lower than 7.6% compared to the close of the previous session. On Friday, recall, the index lost 7.4%.
The capitalization of companies trading on exchanges in Shanghai and Shenzhen fell by a total of $ 2.3 trillion, Vedomosti writes about this, citing material from the Financial Times.
The rapid drop in stock market quotes forced the People's Bank of China to lower interest rates and reserve standards for some banks. The rate on loans on the code dropped to 4.8%, the deposit rate - up to 2%.
The China Securities Market Regulatory Commission (CSRC) is exploring the possibility of suspending initial offerings to stabilize the market, Bloomberg reports. After consulting with the largest brokerage companies in China, the commission can really take such a step - it is expected that the suspension of the IPO will prevent the flow of investor money from the secondary stock market (non-public) to the primary.
Analysts attributed the panic to investors due to a bubble formed in the market due to an excess of liquidity and large-scale speculative trading of shares on borrowed funds. Since the beginning of 2015, the People’s Bank of China, lending to banks, has poured 770 billion yuan into the country's financial system, which is approximately equal to $ 124 billion. For comparison, the EU quantitative easing program, designed to stimulate the world's first integrated economy, “costs” $ 550 billion and is a large-scale action capable of potentially changing the lives of many people in many national economies within the EU.
The Chinese stock market began to grow rapidly amid the influx of foreign investment, and from November 2014 to June 2015, the Shanghai Composite index grew by 115%, peaking from January 2008. UBS experts estimate the inflow of speculative (that is, not designed for long-term strategic investments) capital at $ 1 trillion. since 2008.
Halyk Bank’s decisions are designed to calm the market, at least the analysts polled by FT hope for this. Most of them also agree that the rapid growth of the Chinese stock market is coming to an end, but ahead, most likely, will not be a correction, but a real collapse. Morgan Stanley believes that by mid-2016 the Shanghai Composite Index will drop another 30%.
Most likely, we will no longer see the “largest by volume” IPOs in the Chinese market, such as Alibaba’s entry into trading, and the volumes / shares and the cost of future offerings of companies will be strongly adjusted downward in value.
Following yesterday's trading results, the Shanghai Composite index fell 3.3%, although during the trading session it fell lower than 7.6% compared to the close of the previous session. On Friday, recall, the index lost 7.4%.
The capitalization of companies trading on exchanges in Shanghai and Shenzhen fell by a total of $ 2.3 trillion, Vedomosti writes about this, citing material from the Financial Times.
The rapid drop in stock market quotes forced the People's Bank of China to lower interest rates and reserve standards for some banks. The rate on loans on the code dropped to 4.8%, the deposit rate - up to 2%.
The China Securities Market Regulatory Commission (CSRC) is exploring the possibility of suspending initial offerings to stabilize the market, Bloomberg reports. After consulting with the largest brokerage companies in China, the commission can really take such a step - it is expected that the suspension of the IPO will prevent the flow of investor money from the secondary stock market (non-public) to the primary.
Analysts attributed the panic to investors due to a bubble formed in the market due to an excess of liquidity and large-scale speculative trading of shares on borrowed funds. Since the beginning of 2015, the People’s Bank of China, lending to banks, has poured 770 billion yuan into the country's financial system, which is approximately equal to $ 124 billion. For comparison, the EU quantitative easing program, designed to stimulate the world's first integrated economy, “costs” $ 550 billion and is a large-scale action capable of potentially changing the lives of many people in many national economies within the EU.
The Chinese stock market began to grow rapidly amid the influx of foreign investment, and from November 2014 to June 2015, the Shanghai Composite index grew by 115%, peaking from January 2008. UBS experts estimate the inflow of speculative (that is, not designed for long-term strategic investments) capital at $ 1 trillion. since 2008.
Halyk Bank’s decisions are designed to calm the market, at least the analysts polled by FT hope for this. Most of them also agree that the rapid growth of the Chinese stock market is coming to an end, but ahead, most likely, will not be a correction, but a real collapse. Morgan Stanley believes that by mid-2016 the Shanghai Composite Index will drop another 30%.
Most likely, we will no longer see the “largest by volume” IPOs in the Chinese market, such as Alibaba’s entry into trading, and the volumes / shares and the cost of future offerings of companies will be strongly adjusted downward in value.