BNP Paribas SA is telling investors to buy shares in Chinese brokerages, arguing that the government will do “whatever it takes” to restore confidence in a turbulent and slumping stock market.
“It’s now all about confidence, as fear will trigger forced liquidations and panic selling,” Hong Kong-based analyst Judy Zhang wrote in a note on Friday.
The government may slow initial public offerings and cut a stamp duty as part of a likely “basket of measures” to stabilize the market, according to Zhang. While the Shanghai Composite Index extended its declines on Friday, the analyst upgraded her rating of the nation’s biggest brokerage, Citic Securities Co., to “buy” from “reduce.”
The benchmark fell below the 4,000 level on Thursday for the first time since April, as investors trading with borrowed money continued to unwind their positions.