China Stocks Are Unnerving
Investors Again as Losses Deepen (3)
2017-04-19 10:35:41.995 GMT
By Bloomberg News
(Bloomberg) -- The stability in China’s stock market this year
is showing signs of cracking.Traders point to the securities
regulator’s tougher line on irregularities in the market as the
most likely cause, along with tensions on the Korean peninsula and
fears that a strengthening economy will prompt more tightening by
the central bank.
The ChiNext gauge of small-cap shares, historically a
barometer for the availability of speculative liquidity, is
approaching its lowest level since September 2015. "The stock
regulator has been proactive recently in snubbing speculative
trades," said Yin Ming, vice president of Baptized Capital in
Shanghai. "We might see more such scrutiny for over the year," he
said, adding that state-backed funds may step in to shore up the
market if losses turn excessive.
To be sure, a 30-day index of price swings remains
historically low after the authorities clamped down on speculation
in the wake of 2015’s $5 trillion stock-market collapse.