Arab Today, arab today china stock market disappoints on double cash crunch
Last Updated : GMT 15:00:18
Arab Today, arab today
Arab Today, arab today

China stock market disappoints on double cash crunch

Arab Today, arab today

Arab Today, arab today China stock market disappoints on double cash crunch

Shanghai - AFP

A cash shortage among banks made the Chinese stock market one of the world's worst performing this year, showing how tens of millions of small investors remain at the mercy of government policy. In June and again in December, a liquidity sueeze sparked worries over China's broader economy and hit the stock market -- but the funding crunches were widely viewed as engineered by authorities keen to impose tighter financial discipline over banks. Combined with a tepid rebound in the economy -- the world's second largest -- and persistent uncertainty over a resumption of new share offers flooding the market, Shanghai's benchmark stock index had dropped 7.56 percent in 2013 by the close Monday, the year's penultimate trading day. "Instability in the financial system and expectations that authorities would maintain a tight balance in its monetary policy led to some volatility in the market," BOC International analyst Shen Jun said. In comparison, Tokyo's Nikkei 225 index soared 56.7 percent over the year, the broad-based S&P 500 had surged 29.1 percent by Monday -- having tapped several record highs -- while the CAC 40 in Paris gained 17.4 percent despite the French economy's woes. Even the Hang Seng Index in Hong Kong, which is strongly exposed to the Chinese economy, is up 2.6 percent. China's central bank has shown reluctance to inject extra liquidity into the interbank market as it fends off potential risks to the financial system and clamps down on shadow banking that resulted in excessive credit, analysts said. The moves have caused spikes in the rates at which banks borrow from each other, with the effects spilling over to the stock market. On June 24, the Shanghai Composite Index tumbled 5.3 percent, the biggest single-day decline since August 2009, after the central People’s Bank of China (PBOC) initially shunned injecting liquidity, before eventually relenting. Similar worries also plagued the market in December, sending the Shanghai index down 6.9 percent over a nine-day losing streak, until the PBOC intervened to add funds. "The stock market has always been sensitive to each and every move of policymakers," said Central China Securities analyst Zhang Gang. Similarly, China's authorities hold the power to decide which firms can launch initial public offerings (IPOs) and when they go to market, an example of the control the state retains over many parts of theeconomy. China’s stock regulator has suspended approvals for IPOs for more than one year to alleviate the pressure of an oversupply of shares and prepare for reforms to the listing system. The China Securities Regulatory Commission has said it will give the market a bigger say in the listing mechanism, after the Communist authorities pledged at a key meeting in mid-November to let market forces play a more "decisive role" in the economy. But some market participants are sceptical about reforms, saying the government is loath to completely surrender control and describing the IPO change as window-dressing. "It appeared to be a market-led reform but the substance still implies (government) administration," said an analyst at a Shanghai brokerage, who declined to be named. The regulator has announced it will let investors assess the value and risks of IPOs, but stressed that it will retain "oversight" of stock offerings and information disclosure by companies. The Shanghai broker said the new rules were "like throwing cold water on the market, dealing a heavy blow to those who had overly high expectations towards reforms". Weakness in the stock market came despite China's domestic growth expanding 7.8 percent year-on-year in the third quarter of 2013, snapping two quarters of slowing growth. But recent economic data has sparked worries the rebound might not be sustainable. Authorities have called for a structural adjustment in the economy, curbing traditional sectors such as resources and manufacturing and giving more support for emerging industries. But analysts say those plans have hit shares that are heavily weighted in the Shanghai index. "Looking ahead, the main board will likely drift with the macro-economy with no drastic gains or declines,” said Zhang of Central China Securities. China's stock market rose a mere 3.17 percent in 2012, and the weak returns have prompted local investors to seek alternative investment channels, facing a lack of choices since they are not allowed to invest directly overseas. Instead they have sought better returns in property, weakly regulated wealth management products offered by banks -- and even the volatile virtual currency Bitcoin.

Name *

E-mail *

Comment Title*

Comment *

: Characters Left

Mandatory *

Terms of use

Publishing Terms: Not to offend the author, or to persons or sanctities or attacking religions or divine self. And stay away from sectarian and racial incitement and insults.

I agree with the Terms of Use

Security Code*

Arab Today, arab today china stock market disappoints on double cash crunch Arab Today, arab today china stock market disappoints on double cash crunch

 



Arab Today, arab today
Arab Today, arab today Hats, scarves add beauty to women

GMT 19:10 2017 Friday ,17 February

Hats, scarves add beauty to women
Arab Today, arab today Tourist guide reveals methods of tourist attractions

GMT 17:46 2017 Saturday ,18 February

Tourist guide reveals methods of tourist attractions
Arab Today, arab today To release new antiques collection

GMT 20:33 2017 Friday ,17 February

To release new antiques collection
Arab Today, arab today Air raid kills eight women, child

GMT 06:42 2017 Friday ,17 February

Air raid kills eight women, child
Arab Today, arab today Murder of 2 reporters in Dominican Republic

GMT 22:45 2017 Thursday ,16 February

Murder of 2 reporters in Dominican Republic

GMT 08:14 2017 Friday ,17 February

Bahrain Bourse daily trading report

GMT 21:28 2017 Thursday ,16 February

US Stocks End High on Tuesday

GMT 21:18 2017 Thursday ,16 February

Chinese Yuan Strengthens to 6.8632 Against USD Wednesday

GMT 09:55 2017 Thursday ,16 February

Robust Omani Riyal exchange rate affirmed

GMT 09:00 2017 Thursday ,16 February

Bahrain Bourse daily trading report

GMT 05:07 2017 Thursday ,16 February

Saudi stocks rise 0.6%

GMT 04:45 2017 Thursday ,16 February

Gold prices edge lower
View News in Arabic - Business: أسواق مالية
Arab Today, arab today
Arab Today, arab today
Arab Today, arab today Kidogo provides childcare for underserved

GMT 20:24 2017 Wednesday ,15 February

Kidogo provides childcare for underserved
Arab Today, arab today Tragic fluctuations of Bakhtiari's life revealed

GMT 06:50 2017 Wednesday ,15 February

Tragic fluctuations of Bakhtiari's life revealed
Arab Today, arab today London to tax old cars

GMT 14:06 2017 Friday ,17 February

London to tax old cars
Arab Today, arab today Pluto's unruly moons

GMT 06:31 2015 Thursday ,04 June

Pluto's unruly moons
Arab Today, arab today Competes Sweden and Germans by S90

GMT 22:36 2017 Thursday ,16 February

Competes Sweden and Germans by S90
Arab Today, arab today Porsche reveals new 2018 Panamera

GMT 17:31 2017 Wednesday ,15 February

Porsche reveals new 2018 Panamera
Arab Today, arab today Actress Nadeen Al Rassi views art as her entity

GMT 07:30 2017 Saturday ,18 February

Actress Nadeen Al Rassi views art as her entity
Arab Today, arab today Teach monkeys to recognize themselves in mirror

GMT 20:41 2017 Wednesday ,15 February

Teach monkeys to recognize themselves in mirror

GMT 07:05 2017 Friday ,17 February

Singer Diana Karzon will issue a new album soon

GMT 06:40 2017 Friday ,10 February

MP calls for removing text from Islamic story

GMT 13:16 2017 Tuesday ,14 February

First fashion model with Down syndrome

GMT 10:26 2017 Tuesday ,14 February

Emergency UN meeting in Harare

GMT 14:04 2017 Tuesday ,14 February

"Lagom" new Swedish concept in interior design

GMT 12:07 2017 Thursday ,16 February

Bite-mimicking malaria vaccine

GMT 09:03 2017 Thursday ,16 February

Tour guide praises women’s beaches

GMT 13:12 2015 Saturday ,09 May

Sheikh Sultan opens Sharjah Centre

GMT 21:42 2017 Sunday ,12 February

Rania al-Ghazali designs candles of bubbles
Arab Today, arab today
Arab Today, arab today
 
 Arab Today Facebook,arab today facebook  Arab Today Twitter,arab today twitter Arab Today Rss,arab today rss  Arab Today Youtube,arab today youtube  Arab Today Youtube,arab today youtube
arabstoday arabstoday arabstoday arabstoday
arabstoday arabstoday arabstoday
arabstoday
بناية النخيل - رأس النبع _ خلف السفارة الفرنسية _بيروت - لبنان
arabstoday, Arabstoday, Arabstoday