China may introduce a temporary ban on the procedure of initial public offering of securities (IPO)
The Chinese stock market, which experienced a shocking correction last week, continues to be in a fever.
As a result of yesterday's trading, the Shanghai Composite index fell by 3.3%, although during the trading session it fell lower than 7.6% relative to the close of the previous session. On Friday, we recall, the index lost 7.4%.
The capitalization of companies trading on the stock exchanges in Shanghai and Shenzhen fell cumulatively by $ 2.3 trillion, according to Vedomosti, citing the Financial Times material.
The rapid decline in quotations on the stock market forced the People's Bank of China to reduce interest rates and reserve requirements for some banks. The loan rate per code dropped to 4.8%, the deposit rate dropped to 2%.
The China Securities Market Regulatory Commission (CSRC) is exploring the possibility of suspending initial public offerings to stabilize the market, reports Bloomberg. 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 outflow of investors' money from the secondary (non-public) stock market to the primary one.
Analysts associated panic in investor sentiment with a bubble that was formed in the market due to an excess of liquidity and large-scale speculative stock trading for borrowed funds. Since the beginning of 2015, the People’s Bank of China, crediting banks, has poured 770 billion yuan into the country's financial system, which is about $ 124 billion. For comparison, the EU’s quantitative easing program, designed to stimulate the world's first united economy, is “worth” $ 550 billion and is a large-scale action. that can potentially change the lives of many people in many national economies within the EU.
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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 rose by 115%, reaching its maximum since January 2008. UBS experts estimate the inflow of speculative (that is, not calculated for long-term strategic investments) capital at $ 1 trillion. since 2008.
The decisions of the People's Bank are intended to calm the market, at least analysts hoped for this by those surveyed by FT. Most of them also agree that the rapid growth of the Chinese stock market is coming to an end, but the most likely thing to come is not a correction, but a real collapse. Morgan Stanley believes that by the middle of 2016, the Shanghai Composite Index will drop another 30%.
Most likely, we will no longer see the “largest in monetary volume” IPO on the Chinese market, similar to Alibaba's bidding and the volumes / shares and cost of future shareholdings of companies will be heavily adjusted downwards.
As a result of yesterday's trading, the Shanghai Composite index fell by 3.3%, although during the trading session it fell lower than 7.6% relative to the close of the previous session. On Friday, we recall, the index lost 7.4%.
The capitalization of companies trading on the stock exchanges in Shanghai and Shenzhen fell cumulatively by $ 2.3 trillion, according to Vedomosti, citing the Financial Times material.
The rapid decline in quotations on the stock market forced the People's Bank of China to reduce interest rates and reserve requirements for some banks. The loan rate per code dropped to 4.8%, the deposit rate dropped to 2%.
The China Securities Market Regulatory Commission (CSRC) is exploring the possibility of suspending initial public offerings to stabilize the market, reports Bloomberg. 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 outflow of investors' money from the secondary (non-public) stock market to the primary one.
Analysts associated panic in investor sentiment with a bubble that was formed in the market due to an excess of liquidity and large-scale speculative stock trading for borrowed funds. Since the beginning of 2015, the People’s Bank of China, crediting banks, has poured 770 billion yuan into the country's financial system, which is about $ 124 billion. For comparison, the EU’s quantitative easing program, designed to stimulate the world's first united economy, is “worth” $ 550 billion and is a large-scale action. that can potentially change 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 rose by 115%, reaching its maximum since January 2008. UBS experts estimate the inflow of speculative (that is, not calculated for long-term strategic investments) capital at $ 1 trillion. since 2008.
The decisions of the People's Bank are intended to calm the market, at least analysts hoped for this by those surveyed by FT. Most of them also agree that the rapid growth of the Chinese stock market is coming to an end, but the most likely thing to come is not a correction, but a real collapse. Morgan Stanley believes that by the middle of 2016, the Shanghai Composite Index will drop another 30%.
Most likely, we will no longer see the “largest in monetary volume” IPO on the Chinese market, similar to Alibaba's bidding and the volumes / shares and cost of future shareholdings of companies will be heavily adjusted downwards.
Source: https://habr.com/ru/post/292094/
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