[ad_1]
Wang Tingju/Reuters/File
The Chinese flag flies outside the China Securities Regulatory Commission (CSRC) building in the financial district of Beijing, China.
Hong Kong
CNN
—
China’s top securities regulator has restricted short selling in the latest effort to stem the long-running $6 trillion stock market crash that began in 2021.
The China Securities Regulatory Commission announced on Sunday that it would “completely” suspend lending of restricted shares on mainland China’s stock exchanges.
The restrictions, which took effect on Monday, will affect shares held by a company’s employees or strategic investors, who are prohibited from trading. It remains on the stock market for a certain period of time, but can be lent to others for short selling.
Short sellers borrow stocks from their brokers and sell them immediately in hopes of buying them back at a lower price before having to return the stocks later.
Regulators also directed securities finance companies that borrow stock from institutional investors to wait one day before offering the stock to brokerages, who can then lend the stock to short sellers. Previously, these shares were readily available to brokerages.
China in October placed certain limits on short sales of stocks held by strategic investors, but the stock market continues to tumble and analysts fear the new move could fail. ing.
” [mainland Chinese] “The market was largely silent on this policy change,” said Ken Chan, chief Asian currency strategist at Mizuho Bank in Hong Kong.
On Monday, the Shanghai Composite Index rose 0.3%, and the Shenzhen Component Index fell 1.6%. Investor sentiment was also soured by a Hong Kong court ordering Evergrande, a symbol of China’s property crisis, to liquidate.
“This liquidation at least reminds investors of China’s real estate downturn and may deter foreign investors from returning to investing in China for the time being,” Zhang said.
Bloomberg/Getty Images
The Shenzhen Stock Exchange is the second largest in mainland China after Shanghai.
Peace has returned, but challenges remain
Chinese authorities have stepped up measures over the past week to stem a stock market crash.
Last Monday, major market indexes plummeted, with year-to-date losses ranging from 7% to 10%.
Then, following a series of unusual interventions and announcements by concerned Chinese authorities, Hong Kong’s Hang Seng Index (HSI) rebounded to end the week up 4.2%, and the blue-chip Shanghai Shenzhen CSI300 rose by 2.0% in the week. % increase was recorded.
Last Tuesday, Bloomberg reported that Chinese authorities were considering ordering state-owned companies to buy 2 trillion yuan ($282 billion) worth of stocks using funds held in offshore accounts. Ta.
The next day, in an unprecedented move, regulators announced they were considering evaluating the performance of top executives at state-owned enterprises based on their stock market value.
On the same day, Li Yunze, director of the newly established National Authority for Financial Regulation (NAFR), vowed at an international financial conference in Hong Kong to further open up China’s $64 trillion financial industry to foreign investors.
Hours later on Wednesday, People’s Bank of China Governor Ban Gongsheng said the central bank could reduce the amount of cash it needs to hold in reserves, potentially providing up to 1 trillion yuan ($141 billion) over the long term. Announced unexpectedly. Mobility into the economy.
[ad_2]
Source link
