Local authorities setting up funds to help listed companies
The move is shift from stock purchases done by ‘national team’
China’s efforts to arrest destabilizing declines in domestic stocks in recent years have become so well recognized that market players coined the term “the national team” to describe buying by state-owned funds. In the latest bout of turmoil, there’s been a twist.
It’s local authorities who have been most active to cushion what’s been a 30 percent plunge in the Shanghai Composite Index from its January high. Officials in the southern cities of Shenzhen and Shunde as well as Beijing’s Haidian district have moved to help listed firms from their areas, according to local authorities and media reports.
Rather than the across-the-board purchases seen in efforts led by the central government in the wake of a $5 trillion sell-off in 2015, this time around aid appears to be channeled to specific companies in need of liquidity support. Read More…