China’s stock market is a largely closed affair, with the major players being large domestic companies and wealthy citizens, not foreign speculators and investors. To the extent that those big players are taking money out of China to diversify their copious savings — and the dollar outflows suggest they definitely are — then they will put less cash into equities.
Chinese authorities have sought to relieve pressure on equity markets through other measures, notably share purchases by national champions, such as major banks. On Thursday, Chinese securities regulators published new rules restricting share sales by large holders and by corporate officers and directors.
Bill Witherell, chief global economist at Cumberland Advisors, an asset manager, said the interventions reflect the “manipulated nature” of current prices on Chinese equity markets. “Market-clearing prices could be considerably lower,” he added.
#AllTheNews 