TIMELINE: China’s Efforts to Stem $3.2 Trillion Stock RoutSarah McDonald
China’s policy makers are coming up with new tactics almost every day to stem a rout that’s wiped $3.2 trillion off the world’s second-biggest stock market.
Saturday June 27: *PBOC CUT: After the Shanghai Composite Index posted a 19 percent, two-week plunge, the central bank cut its benchmark lending rate and deposit rate, while also reducing required reserve ratios for some lenders
Monday June 29: Shanghai Composite rises 2.3 percent at the open before reversing course and plunging as much as 7.6 percent. Closes 3.3 percent lower.
* CSRC JAWBONING: China’s securities regulator says margin trading at brokerages is “controllable” and deposits in margin accounts are“nowhere near” dangerous levels. China Securities Regulatory Commission spokesman also urges investors to be rational and not to believe “shorting China rumors”
* PENSION CASH: Ministry of Finance posts draft regulations that would allow the nation’s basic endowment pension fund to invest in stock markets
Tuesday June 30: Shanghai Composite falls 1.1 percent at the open and extends declines to more than 5 percent, before surging 5.5 percent by the close for its biggest one-day gain since 2009.
* INDUSTRY SUPPORT: Asset Management Association says money managers should avoid panic selling because a “structural rally is brewing.” The Securities Association of China said forced liquidation of margin lending through non-brokerages is “small” as a percentage of stock turnover
Wednesday July 1: Shanghai Composite opens 1.5 percent lower, rallies as much as 0.9 percent, then reverses to close 5.2 percent lower.
* MARGIN LOOSENING: CSRC says will no longer require brokerages to force the sale of stock held by clients with insufficient collateral, and will allow “reasonable rollover” of margin trading. Regulator also says it will let all brokerages issue short-term bonds to increase financing channels
* FEE CUT: China’s two bourses will reduce fees by 30 percent starting Aug. 1, the Shanghai Stock Exchange said after the market close
Thursday July 2: Shanghai Composite opens up 0.1 percent, falls as much as 6.4 percent and closes below the 4,000 level for the first time since April
* PETROCHINA SURGES: PetroChina rises 8.8 percent in Shanghai even as market slides, spurring speculation that government linked funds were buying shares of large-cap companies
* CSRC THREATS: Regulator says it will organize a probe with special focus on cross-market manipulation and “strictly” punish offences
* SHORT-SELLERS: CSRC turns the heat up on bears by examining recent short-selling activity for stock-index futures amid the slump, people with knowledge of the matter said
Friday July 3: Shanghai Composite opens 3 percent lower and closes down 5.8 percent to cap a 12 percent weekly retreat.
* CHINEXT PACT: Chairmen and executives of 28 ChiNext-listed companies say they’d like to take “real action” to express confidence in companies and the Chinese economy by boosting stakes in their firms or temporarily halting share sales
* FUTURES COSTS: The China Financial Futures Exchange, where three stock-index futures are listed, makes it more expensive to speculate using the contracts
* BROKERS: Guotai Junan says will suspend supply of some shares for short selling to prevent impact on stock prices
Saturday July 4:
* IPO SUSPENSION: Twenty-eight companies halted their initial public offerings in Shanghai and Shenzhen, according to filings to the nation’s two exchanges.
* MARKET FUND: The Securities Association of China says a group of 21 brokerage firms led by Citic Securities Co. will invest the equivalent of 15 percent of their net assets as of the end of June, or no less than 120 billion yuan ($19.3 billion) in total, to set up a stock-market fund
* EXECUTIVE BUYING: Top executives from 25 Chinese mutual funds, including China Asset Management Co. and E Fund Management Co., promise to “actively” buy stock funds and hold them for at least one year, according to a statement on Asset Management Association of China’s official website
Sunday July 5:
*IPO HALT: CSRC spokesman Deng Ge says there will be no new IPOS in the near future, while the number and value of IPOs will be significantly reduced going forward
*FUND BUYING: Central Huijin Investment Ltd., a unit of China’s sovereign wealth fund, said it bought exchange-traded funds on the secondary market recently and would continue relevant market operations
*FINANCIAL AID: The People’s Bank of China will offer liquidity support to China Securities Finance Corp., which manages the nation’s short selling and margin trading, according to a statement on the CSRC website.
Monday July 6:
*SHARE BUYBACKS: China Vanke Co., the country’s biggest listed property developer by sales, announced a plan to repurchase as much as 10 billion yuan of its Shenzhen-listed shares.
To continue reading this article you must be a Bloomberg Professional Service Subscriber.
If you believe that you may have received this message in error please let us know.