This page has been archived and commenting is disabled.

China Stocks Open Marginally Higher As Regulators Unleash More 'Measures'

Tyler Durden's picture




 

Chinese stocks are opening flat to marginally higher - still lower from Friday's close - despite the government unleashing yet more 'measures' in the name of stability. Having banned 5 accounts - reportedly including Fed-favorite Citadel - China is blaming excess market volatility on short-term short-sellers and has put in place curbs on short-selling that force traders to hold for at least one day. On the bright side, margin traders reduced exposure for the seventh day in a row, reducing outstanding balances to 5-month lows.. which leaves the median China stock trading at a remarkable 61x reported earnings (compared with 12x in Hong Kong).

 

As Bloomberg details,

Investors who borrow shares must now wait one day to pay back the loans, according to statements from the Shanghai and Shenzhen stock exchanges issued after the close of trading on Monday. This prevents investors from selling and buying back stocks on the same day, a practice that may “increase abnormal fluctuations in stock prices and affect market stability,” the Shenzhen exchange said.

 

The short-selling curbs are the latest measures the government is taking to prop up share prices and prevent market manipulation after an almost $4 trillion selloff. Regulators are probing “malicious” short selling and have examined the futures trading accounts of foreign investors. They’ve also banned stock sales by major shareholders, suspended initial public offerings and compelled state-run institutions to support the market with equity purchases.

As Reuters adds,

"This is apparently aimed at increasing the cost of shorting and easing selling pressure on the market," said Samuel Chien, a partner of Shanghai-based hedge fund manager BoomTrend Investment Management Co.

 

He added, though, that short-selling was already difficult, referring to other efforts to limit the practice. These include a move by Chinese brokerages to limit short-selling business.

*  *  *

But for now it is having only modest impact...

 

The more measures they apply, the higher the price of pork goes and the more squeezed by inflationary pressures - no matter how bad the economy - the PBOC is to not cut RRR.

 

In other words, a 21% surge in pork prices - a major component of China CPI - forces the PBOC toapply piecemeal measures and not apply broad based  cuts to stimulate the economy. So while some talking heads pray for more bad data in China, they are missing the crucial panic factor - soaring food prices will mean more social unrest than plunging stock prices.

 

Charts: Bloomberg

 

- advertisements -

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
Mon, 08/03/2015 - 21:48 | 6387775 BullyBearish
BullyBearish's picture

What we NEED is a full-blown cyber stock maket war to get valuations back to where they should be...

Mon, 08/03/2015 - 22:09 | 6387845 booboo
booboo's picture

Pork prices spike in China because of the iron clad law of supply and demand or because of the new iron clad law of hot money chasing yield and a billion chinese cheer as they gaze up at the lit boards and see that the price is rising. It's like dumb fucking people who sell their home for more than they payed for it only to find out that the new home they buy in the same town with the same features and square footage is more than they think it should be. It's as if they thought that only their home should go up in price. they cheer on "Growth" but scratch their head at "inflation".

Mon, 08/03/2015 - 22:31 | 6387927 rogerrabbithole
rogerrabbithole's picture

Exactly.

Mon, 08/03/2015 - 23:26 | 6388108 NoDebt
NoDebt's picture

Oh, so the Chi-Coms are struggling to control their paper "markets"?  Cry me a river of dead pigs.

Another statist paradise, the toast of the town in global elite circles in recent years, the "miracle of the east", to be feared and worshipped but most importantly COPIED as the new model of how things should be run worldwide for the "greater good".

Fuck these assholes.  This is a slightly modified version of Japan, Inc., circa 1988, at best.

 

Tue, 08/04/2015 - 02:10 | 6388427 thestarl
thestarl's picture

At the end of the day they're commies,command and control did'nt end well for the USSR.

Tue, 08/04/2015 - 05:51 | 6388603 BringOnTheAsteroid
BringOnTheAsteroid's picture

It won't end well for the US either.

Tue, 08/04/2015 - 08:06 | 6388771 Arnold
Arnold's picture

Should have stuck with the spaghetti and gunpowder meme, rather trying to build a reinvention of a financial system that features smoke and mirrors instead of glass  houses.

Mon, 08/03/2015 - 21:50 | 6387786 Dragon HAwk
Dragon HAwk's picture

I mean do they hand out a new printed set of rules each day as you walk out onto the trading floor ?

 get up 2 hrs early for work just so you can read today's press release  rule handouts ?

or does a blue screen pop up when you try to execute that reads, Sorry Something Happened ?

Mon, 08/03/2015 - 23:29 | 6388118 NoDebt
NoDebt's picture

Yes.

You wonder why anyone with any accumulated wealth is trying to get the hell outta there with it as fast as possible?

Tue, 08/04/2015 - 02:13 | 6388433 thestarl
thestarl's picture

Can say that again ND they're pouring their ill gotten wealth into the Sydney property market.

Mon, 08/03/2015 - 21:57 | 6387814 arbwhore
arbwhore's picture

A nice test run for the NYSE. Let's see where they start printing to keep the people from revolting.

Mon, 08/03/2015 - 22:22 | 6387889 sun tzu
sun tzu's picture

It's like the roach motel. You check in, but you can't check out. Who wants to invest in a market where you go to prison for selling?

Mon, 08/03/2015 - 21:58 | 6387816 Omega_Man
Omega_Man's picture

short sellers suck anyway.... ban them.... their work is from the devil... 

Mon, 08/03/2015 - 22:00 | 6387822 arbwhore
arbwhore's picture

Except naked shorting of gold, silver and their miners. That is, indeed, God's Work (TM).

Mon, 08/03/2015 - 22:11 | 6387852 booboo
booboo's picture

That's because they devil knows the details and the details tell the story of value.

Mon, 08/03/2015 - 22:12 | 6387858 Atomizer
Atomizer's picture

Shanghai must of had the Central banking memo delivered by pigeon express service. 

Mon, 08/03/2015 - 22:19 | 6387878 moneybots
moneybots's picture

"China Stocks Open Marginally Higher As Regulators Unleash More 'Measures' "

 

It took 2 1/2 years for the Nasdaq to drop 76%.  A bit longer for the 1929 DOW to lose about 90%.

China can't prevent the bubble from deflating.  Math always wins.

Mon, 08/03/2015 - 22:20 | 6387883 holdbuysell
holdbuysell's picture

Taking a step back from this, one can see just how absolutely ridiculous this whole sham has become. Are they free markets or not?

I guess only on up days.

What a joke.

Mon, 08/03/2015 - 22:23 | 6387896 sun tzu
sun tzu's picture

Are they free markets or not?

You really need to ask?

Mon, 08/03/2015 - 23:39 | 6388144 holdbuysell
holdbuysell's picture

Rhetorical.

Still, I know people that listen to their brokers that P/E's are reasonable, future growth looks good, and there's cash on the sidelines waiting to come in.

The Matrix comes to mind.

Mon, 08/03/2015 - 22:22 | 6387891 TheRideNeverEnds
TheRideNeverEnds's picture

So I have to wait a day to cover a short, I almost always do that anyway cause theta is time and time is money.

 

How long do I have to wait to sell if I buy though?  

 

I can sell out my long shares right guys?  

 

guys?

 

 

Mon, 08/03/2015 - 22:23 | 6387897 moneybots
moneybots's picture

"He added, though, that short-selling was already difficult, referring to other efforts to limit the practice. These include a move by Chinese brokerages to limit short-selling business."

 

NO BID.

 

Short selling did not prevent the bubble from forming and banning it won't prevent the bubble from deflating.

Mon, 08/03/2015 - 22:26 | 6387902 TheRideNeverEnds
TheRideNeverEnds's picture

yea reamember when they did that with the US bank shares the last time the market tanked here and they bounced a little then went basically no bid down another what 20-75 some 100%.

Mon, 08/03/2015 - 22:24 | 6387899 Atomizer
Mon, 08/03/2015 - 22:58 | 6388012 HardlyZero
HardlyZero's picture

Asia markets 3 down and red  now: Nikkei, Shanghai, HSI.

Streams crossing...!

http://www.cnbc.com/

Mon, 08/03/2015 - 23:16 | 6388077 bid the soldier...
bid the soldiers shoot's picture

I got a fortune cookie tonight at my favorite Chinese restaurant.

Confusius say: Wall Street trader who locked in and can't sell have his cock in a wok.

Mon, 08/03/2015 - 23:34 | 6388135 franzpick
franzpick's picture

My screens say that a 350 point drop tomorrow or soon will put in the DJIA bear market lower low at 17250, where varsity knife-catchers and BTFDippers will gather for a short-term game of chance, before things go way lower:

http://bigcharts.marketwatch.com/quickchart/quickchart.asp?symb=DJIA&insttype=&freq=1&show=&time=8

Tue, 08/04/2015 - 05:55 | 6388607 BringOnTheAsteroid
BringOnTheAsteroid's picture

The "or soon" addendum was a bit of a cop out

Tue, 08/04/2015 - 07:57 | 6388749 goldman58
goldman58's picture

Idiot ChiCom CROOKS

They are only causing a bigger liquidity problem.

The ChiCom markets have not finished deleveraging yet

They are screwed

Do NOT follow this link or you will be banned from the site!