6 Jul 2015
Chinese equities plunge triggering further policy reaction by the authorites over the weekend – DB
FXStreet (Barcelona) - Darren Gibbs, Chief Economist at Deutsche Bank, shares the key developments in the Chinese market over the weekend in lieu of the equity market plunge seen in recent weeks.
Key Quotes
“In reaction to the continued plunge in equity markets, over the weekend the CSRC announced that new IPOs would be suspended. In addition, the Securities Association of China announced that a group of 21 brokerages will invest at least CNY120bn in a stock-market fund. The CSRC also announced “liquidity support” for such a fund from the PBoC, although our Chinese economist argues that it is unlikely that the PBoC would undertake significant stock purchases, either directly of indirectly.”
“According to Bloomberg a broader grouping of mutual funds have committed to buying shares and to holding them for at least a year. The aim of all of these announcements is to restore public confidence in the market.”
“Notwithstanding recent developments in the equity market our Chinese economists maintains his growth and policy outlook for 2015. He continues to expect growth to pick up to 7.0% in Q3 and 7.2% in Q4 from 6.8% in Q2, supported by further a policy easing.”
Key Quotes
“In reaction to the continued plunge in equity markets, over the weekend the CSRC announced that new IPOs would be suspended. In addition, the Securities Association of China announced that a group of 21 brokerages will invest at least CNY120bn in a stock-market fund. The CSRC also announced “liquidity support” for such a fund from the PBoC, although our Chinese economist argues that it is unlikely that the PBoC would undertake significant stock purchases, either directly of indirectly.”
“According to Bloomberg a broader grouping of mutual funds have committed to buying shares and to holding them for at least a year. The aim of all of these announcements is to restore public confidence in the market.”
“Notwithstanding recent developments in the equity market our Chinese economists maintains his growth and policy outlook for 2015. He continues to expect growth to pick up to 7.0% in Q3 and 7.2% in Q4 from 6.8% in Q2, supported by further a policy easing.”