This page has been archived and commenting is disabled.
China Makes Selling For Big Investors Illegal
With another bloody session in the books for China’s bursting equity bubble, it’s now abundantly clear that Beijing and the PBoC have lost control not only of the market but of the narrative as well, despite dozens of attempts to steer both in the “right direction.”
Having corralled selling by the National Social Security fund earlier this week and after discouraging local reporters from mentioning selling in the press, China has now made it illegal for big investors to dump shares over the next six months. Here are the details via Bloomberg:
China’s securities regulator banned major shareholders, corporate executives and directors from selling any of their stakes for six months, the latest effort to stop a $3.5 trillion rout in the nation’s equity market.
Controlling shareholders and investors holding more than a 5 percent stake in a company will be prevented from cutting their holdings over that time period, the China Securities Regulatory Commission said in a statement.
And here’s the official word from the CSCR (Google translated):
Recently, the stock market fell irrational, for the maintenance of the capital market, and earnestly safeguard the legitimate rights and interests of investors, is now on the relevant matters are announced as follows: First, from now on within six months, the controlling shareholders of listed companies and shareholders holding more than 5% (hereinafter, saying large shareholders) and its directors, supervisors and senior management personnel shall not reduce shares held by the secondary market. Second, the major shareholders of listed companies and the directors, supervisors and senior management personnel who fails to reduce shareholdings in the Company, the China Securities Regulatory Commission will be given serious treatment. Third, the major shareholders of listed companies and the directors, supervisors and senior management personnel in the six months after the reduction of shares from shareholders with specific measures, separately.
Yes, the stock market "fell irrational" lately. And by "irrational" the CSCR apparently means that temperament that tends to fall over people once they realize they've helped to faciliate a completely "irrational", debt-fueled mania that's sent valuations on many listings into the stratosphere and lured in millions of farmers and hairdressers who are now collectively leveraged to gills.
In any event, this, like every other move in China's rapidly expanding plunge protection playbook, will fail miserably, meaning Beijing with ultimately be left with no choice but to "halt" whatever shares are still trading by the end of the week.
We can now add one more desperation measure to the annotated history of Chinese market intervention:
»
- 38317 reads
- Printer-friendly version
- Send to friend
- advertisements -
Now if that is not a reason to finally wake up - then nothing will be it anymore.
So much for "fair" markets.
Only idiots and dumb sheeple are still in this casino.
Guess China is sick of you guys dumping on them.... and they DDOS'd you?
Perfect, blame China, just as predicted.....
But even now it is not yet time.....so imagine what is coming.
Frigging roller coaster to the top peering over the bottomless edge....
https://aadivaahan.wordpress.com/2013/05/28/are-you-seeking-polishing-re...
We have much to learn from China.
We should do the same here.
Didn't Dick Fuld do the same thing here? Well, he did threaten to burn the shorters arms back to their fucking elbows. And I'd say they've pretty much done that. So whats all this squealing about China for? They weren't the first to pull this shit. But they have proven they are as corrupt as the den of thieves in DC and NY
China likes free markets just as much as the west does........as long as they are only going up, otherwise it's back to communism to keep it all kosher.
"so much for" reserve currency status...really folks, even if the currency is backed by gold, do you trust the Chinese government with your wealth?
When shit hits the fan, do you TRUST the Chinese government to convert your wealth to physical gold upon your demand...lol...NO FUCKING WAY....they won't even let you sell stock you own...China is NO WAY NEAR "reserve status" even if it's 100% backed by gold...NO FUCKEN WAY.
Exactly. I thought, "so much for letting the market work". Then I realized that when they do this, it's not a market anymore.
There are no global scale markets anymore, anywhere. They are allowed to operate as long as the manipulation can keep them moving up. If there is any hint of "irrationality" (read: actual human emotion and reaction to insanity), then the market is "broken" or - in China's case - banned.
Today's financial world. Surprising we keep watching, when we know that what we are watching is a myth. Weird.
Still not impressed with all of this long view planning I keep hearing is going on in China. Seems like the regular old failed central planning to me.
Recently, the stock market fell irrational,
It's just a "configuration issue," (i.e., Wi Tu Lo!)
I think you struck a valid note. It would have to be structured so the guarantee is that the gold is there. But then again, I wouldn't expect problems with a gold backed currency. But then again, we may never see free markets again anywhere on the planet.
How is China any different than the US of A in that regard?
It is doing this shit faster and it doesn't hold the WRC.
Perhaps China is crashing because it was one of the few markets that still had an exit door?
Doors are closing. Please Stay clear of the doors.
China is 100% correct in it's moves; we all know that, sometimes, "You gotta suspend the Free Market in order to save it"....
Having "Technical Difficulties" that stops trading on the NYSE helps out in a crunch....er...CRASH.
Hardly wait for the 500 point Down Day. (Maybe we can actually beat that 777 record?)
"
Recently, the stock market fell irrational"
When it was going up irrational, nobody complained.
Yes but some perspective courtesy the The Economist.
"CHINA is certainly not the first country to try to prop up a falling stockmarket. The central banks of America, Europe and Japan have all shown form in buying shares after crashes and cutting interest rates to cheer up bloodied investors. But the circumstances and the manner of China’s intervention of the past ten days make it an outlier, worryingly so.
The trigger in China’s case is perplexing. Yes, the stockmarket is down a third over the past month, but that has simply taken it back to March levels; it is still up 80% over the last year. Growth, though slowing, has stabilised recently. Other asset markets are performing well. Property, long in the doldrums, is turning up. Money-market rates are low and steady, suggesting calm in the banking sector. The anticipated correction of over-valued stocks hardly seems cause for much anguish.
Lost in all the drama about the stockmarket is that it still plays a surprisingly small role in China. The free-float value of Chinese markets—the amount available for trading—is just about a third of GDP, compared with more than 100% in developed economies. Less than 15% of household financial assets are invested in the stockmarket: which is why soaring shares did little to boost consumption and crashing prices will do little to hurt it. Many stocks were bought on debt, and the unwinding of these loans helps explain why the government has been unable to stop the rout. But this financing is not a systemic risk; it is just about 1.5% of total assets in the banking system.
If economic stability is not in peril, why then the panic? The most compelling explanation is politics. The government has staked much credibility and prestige on the stockmarket. When the going was still good, the official press was chock-a-block with articles about how the rally reflected the economic reforms that Xi Jinping, China’s top leader, was set to push. Li Keqiang, the premier, said repeatedly that he wanted equity markets to provide a bigger share of corporate financing—comments, from punters' perspective, not unlike waving a red cape in front of a bull. The sudden end to the rally is the first major dent in the public standing of the Xi-Li team. The botched attempts to stabilise the market only make them look weaker, giving succour to their critics."
Fuck that rag. If you're reading the economist, you must enjoy a good dumbing down, huh?
Now they're getting the idea. See, just watch what the mighty U.S.S.A does and we can learn you a thing or too.
Woah, Doc, I feel like I just time-warped forward about 2 hours. And I wasn't even drinking this time.
I guess we're back up finally.
Yeah, no shit. I was getting a bit twitchy there.
YUP......gotta make sure the market is uni-directional....after all ya can't have losses!! That would be un-Amerikan
I think they should just set a fixed price for all publically traded stock.
Force companies to maintain a fixed quantity of shares issued.
Force any buy/sells to trade at the fixed levels with minimal spreads.
Any price movement to the fixed price must seek Beijing approval first.
I know you know this, but this would be the case for all markets: Beijing, London, New York, Brussels, etc...
I think you're on to something. Sounds like an idea so good they won't be able to resist it.
More proof that coercion is necessary for the proper operation of free markets.
Capitalist Profits; Socialized losses.
A few will walk with billions in profit from this market runup...while billions of Chinese suffer the crash.
All of this is no different than being a slave on a plantation.
Pick the cotton and you get a shack and some gruel.
There is no money, only day to day survival.
Killing people with debt, not guns.
Unless they get out of line.
Fucked up
Hotel Chongqing
worked so well for lehman cros... for a few days.
then the collapse resumed.
Pretty clear "5 waves up" with a vertical 5th wave blowoff in the Chinese market..this is just the first of "3 waves down"..I expect a solid rally at some point...then another massive selloff. After that? Will they go the US 2009 route or the Japan 1990 route...we'll have to wait and see.
Zero Hedge is up. Will miracles never cease in the land of the free?
I was starting to get the DT's there.
I figured .gov pulled the plug. It WILL happen someday...
I blame North Korea. Or Russia. Maybe China.
My money is on China......they don't like this shit, telling it how it is...................... beware the yellow peril.
I was thinking to myself about what I would do if today was the one...
Right - it's important to get out from behind the keyboard, and find ZH allies locally - so that when that happens, we won't be alone.
Seems reasonable.
HaHaHa...stupid Chinaman. Old Confuscius saying: Where there will, there is way.
In a country well governed, poverty is something to be ashamed of. In a country badly governed, wealth is something to be ashamed of.
Confucius
Man with hole in pocket feel cocky all day.
That's a long time to hold a big dump!
Perhaps on the side of the road would be the appropriate location for said dump. After all, this is China.
T-Minus 6 months for implosion....
This will end well
I hope the financial world burns. It's about time.
LOL, sure the stock market isn't in a bubble...
It's what happens when bubble gets big. They burst.
That will just stop big investors going back in. How stupid.
my thought exactly
good luck attracting capital going forward
The Chinese government will soon make "investing" by big shareholders, insiders etc, mandatory.
NSA took ZeroHedge offline so they could scour the bowels of it's database for e-addresses and IP address of all it's loyal followers. Let the purge begin.
Hey Fedfucks, My place is the one with the Gonzalez flag outside . . . where the US flag used to go . . . before you tyrants stormed the meeting in Bryan TX.
Let's get it on!
Go Texas!
I post my physical address and name.
Thomas O'Brien
12223B Woodside Ace.
Lakeside, CA USA
FUCK THE NSA.
Do you get it? I am in no fear of them whatsoever. I am IN THIER FACE.
Are you?
My name is Hillary Clanton. Fuck the NSA
So I don't have to worry about my Chinese mutual funds after all?
the buying is never irrational...only the selling.
WTF, ban selling stocks. That means iliquidity becomes even more illiquidity. Stupid....
Start dumping any estate properties.
Does that mean the biggest selloff has now been delayed to 6 months later?
Yes.
I'd say it will make small to medium investors sell while they've still got the chance!
So your a Chinese company director with margin loan with a shit load of your own stock.
And you can't sell!
BROKER AND BANK GOING TO LOVE YOU,
So what's the plan here? Small investors still can't get out unless there's someone to buy from them, not just not sell at the same time. Is the PBOC or some other arm of the government planning to hoover up small investors' shares while the big boys are blocked out from the teat?
I'm sure those ChiComs are cursing capitalism vigorously about now...even as we're cursing crony capitalism ourselves...but what's the difference between ChiCom "capitalism" and USA/EU/Japan crony capitalism - they both tend to or are totalitarian - only the USA version is more 'sophisticated' in its debt serfdom sophistry and total control. After all we have an election coming up with a choice between two bubbles to fill in, and the ChiComs only get one bubble to fill in, with way fewer voters (although we're catching down to that), and much cheaper elections.
Haha the US did say whoever done that previous theft of .gov data would pay.. They got 2 birds with one stone, smashed any chance of Yuan threating USD reserve status, jacked about $2,500 from each Chinamans coin. Pure genius.
Make it illegal to sell!
Why didn't the West think of that?
That will stop the sqaundering of means on unproductive ventures!
Why, because THEN the recipients of investment money would be able to rely on their funding whether they produce or not!
So they won't have to worry about what happens if t is discovered that they only built the FRONT of a company, and then ran away with the rest of the money!
Sure!
That'll fix it!
(Lawyer's Note: The value refered to as "it" is the conception that force threatening survival can trump other conservative survival decisions...i.e. Most people will prefer to be killed by the consequenses of government demands rather than directly by the government.)
Chinese hacked into Zero Hedge for all the negative reports Zero hedge is putting out. Zero must be hitting a sore point. Good work Zero Hedge.
Yes! THAT'S How you do it.. Free markets, Price Discovery.. No..No.. It has to be regulated.. This is when you buy.. this is when you sell.. Everybody knows., it's schedule, we sleep well and it's planned..
I think we are following this formula pretty closely and if not there yet we will be .. any time
Opium futures are up 36%.
A roach motel.
Nothing instills confidence like barring people from selling. The popcorn is out and the fireworks are starting. This is going to be a great show.
That's it. I'm taking my ball and going home.
The corrupt officials in China wanna get out, quick.
Shocked I tells ya. So much for China taking over as the next great fiat. Eventually no selling will be permitted. Where are all the shills that were sucking off the next great rulers of the world now. Psychopaths always change the rules when things don't go their way.
Just remember its only irrational on the way down. Never on the way up.
My Chinese friends (below) are losing a ton of money:
Sum Ting Wong, We Too Lo, and Ho Lee Fuk
I dont know what to tell them?
they should have been reading zerohedge.
I Think the Chinese grandmothers will now leave the rigged casino and get back to real money, gold.
What kind of market is called a market when you can't legally sell?????
Icarus
this is getting more entertaining by the minute
I love it when commies become capitalists and then swing back to being commies again...its almost as funny as watching our capitalists become commies and pretend to be capitalists.
They are all control freaks. EOS.
Oh how I WISH the same edict would be made in the United States - I would LOVE to watch every MULTI-NATIONAL institute stock buyback programs for 2015Q4 to ensure that money was returned to their "shareholders" in time to enjoy the holidays.
We have now started to see the true colors of chinese manipulators. The Plan B- Death of capitalism is still in progress, whether in the east or the west.
Man who goes to bed with hard problem, wakes up with solution in hand.
Tomorrow is a new day.
It is all Capitalism's fault in general...and the West's fault...
...for insisting that getting something-for-nothing is impossible.
Why not make it illegal to trade stocks and be done with it.
We didn't make it illegal to trade stocks. But we did the next best thing......WE SHUT THE SUCKER DOWN so NO ONE could sell................NYSE shut down indefinitely!
Icarus
People will start selling their Bentleys and Maesaratis to pay for their margin loans.
1) China doing same shit as USSA and Europe lesson leaned stay out of the "Markets" when things goes South
2) God bless Bitcoin and decentralized markets so we remove government interference on markets.
3) A market that you can't sell isn't a market.
4) BTFD.
Is that what China calls 'Soft Landing'?
Have You Tried Turning It Off And On Again?
if this wont work then try the Executive Order 6102
They got it wrong; the market is falling rational
Why don't they just read the history books.
Not like this is anything new.
Recently, the stock market fell irrational,
No, the stock market "rose irrational". The fall makes perfect sense.
One more reason not to invest in China (or the other BRICs for that matter): the government will change the rules whenever it feels the change would serve it's interests. Actually, come to think of it, that argument applies pretty much everywhere.
Your last sentence makes you an enemy of US and EU.
We regulated some folks.
O, China regulates? Really?
LIke FED?
LIke SEC
Like congres and senate?
Regulation=lrgal robbery. THose above mentioned are nothing more, thne robber barons.
Illegal to sell? How pathetic, they should make it mandatory to buy MOAR!