Jul 08

China- Toast-To-Market-Manipulation

China Makes Selling For Big Investors Illegal (ZeroHedge, July 8, 2015):

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:



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2 Responses to “AND NOW: China Makes Selling For Big Investors Illegal”

  1. Marilyn Gjerdrum Says:

    The US ought to stop the big fund managers from manipulating the markets before we mirror China’s markets here. China’s market has continued to plummet since June 12th…….Even government intervention cannot stop it. This is what happens when the markets are tightly controlled/rigged by a few greedy guts. Eventually, these complex markets start bursting out of their seams.

    All the problems China endeavors to rein in are ones that we have in our markets today. Why can’t anyone show some sense and curtail these crooks before it spreads to us? It might already be too late, I don’t know.

    China, Greece, the Euro………the Tsunami is building. Very disconcerting to those of us paying attention.

  2. Marilyn Gjerdrum Says:

    Chinese investment regulations allow people to put up their homes to buy into the stock market. This is terrifying, the repercussions from such economic gamesmanship might just be showing up now, and that indicates China’s crash is just beginning…………….

    I urge everyone to read this article.


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