China Stocks Crash Despite Major Government Intervention

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China Stocks Crash Despite Major Government Intervention

No matter how hard the Chinese government tries to encourage more buying of stocks with new policies, Chinese stocks continue to fall. In fact, the Chinese government has just banned large shareholders from selling shares. As Richard Frost of Bloomberg News first reported (English text via google translate)

China Securities Regulatory Commission
[2015] No.18
Recently, the stock market fell irrational capital markets to maintain stability, safeguard the legitimate rights and interests of investors, is now on the relevant matters are announced as follows:
First, from now on within six months, the controlling shareholders of listed companies and shareholders holding more than 5% (or less saying the major shareholder) and its directors, supervisors and senior management personnel shall not reduce shares held by the secondary market.
Second, the major shareholders of listed companies and the directors, supervisors and senior management personnel who fails to reduce shareholdings in the Company, the China Securities Regulatory Commission will be given serious treatment.
Third, the major shareholders of listed companies and the directors, supervisors and senior management personnel in the six months after the reduction of shares from shareholders with specific measures, separately.

China Securities Regulatory Commission July 8, 2015

What Investors Need To Know When Choosing A Private Equity Manager

investor 1652197064It's no secret that this year has been a volatile one for the markets. The S&P 500 is down 18% year to date, while the Nasdaq Composite is off by 27% year to date. Meanwhile, the VIX, a key measure of volatility, is up 49% year to date at 24.72. However, it has spiked as Read More

Equities analysts point out that Chinese markets have lost close to a fifth of their value over the last week or so, but this correction was preceded by a historic bull run that saw markets more than double in just over a year.

Of note, the main Shanghai index still is up over 70% from a year ago, but the millions of novice investors who piled in just before the peak are now holding shares that are worth less than they paid or selling for a large loss. This situation is a major blow to the government’s plan to transition the