[Epoch Times, July 30, 2021](Epoch Times reporter Zhang Yujie comprehensive report) After the CCP issued a series of new regulations to control the Internet and education and training industries, related companies have recently plunged in domestic and overseas stock markets, and A-shares are even more in two Trillions disappeared instantly within a day. The Chinese Communist Party’s Xinhua News Agency urgently issued a soothing article, but analysts are generally not optimistic about the market prospects because the political considerations of the CCP to suppress companies have made investors feel risky.
The mainland media reported on July 29 that the three major A-share indexes plunged sharply, with more than 4 trillion yuan evaporated on Monday (26th) and Tuesday (27th) alone; in the last three trading days, northbound funds have accumulated net Sold more than 21 billion yuan.
Bloomberg data shows that since last Thursday (22nd), China and Hong Kong stocks have accumulated nearly US$1.5 trillion in evaporation.
China West Securities analyzed this wave of stock market sell-offs and believes that the implementation of regulatory policies in some sectors may lead to uncertainty in the main business operations of companies in some industries, causing market concerns.
Recently, the Chinese Communist Party has frequently issued “new regulations” for Internet companies and the education and training industry. For example, a document issued on July 24 prohibits the approval of subject-based extracurricular training institutions for students in compulsory education. Purchasing assets of discipline training institutions by issuing shares or paying cash; the authorities strictly control Internet companies for reasons such as “anti-monopoly” and “network security”. Companies such as Alibaba, Tencent, Didi Chuxing, and Meituan have He was severely fined or reviewed within a few months.
The stock prices of related companies in the mainland, Hong Kong and US stock markets have plummeted. On July 23 and 26, when U.S. stocks surged, China’s concept stocks plummeted, and the total market value of the two trading days evaporated by a total of 250 billion U.S. dollars.
Official emergency “comfort” analysis: hard to work
At around 11 pm on Wednesday (28th), the Chinese Communist Party’s official media Xinhua News Agency issued an article in response to the stock market crash. The firm determination to open up remains unchanged, and the pace of comprehensively deepening reforms in the capital market will not stop.”
The article also specifically mentioned the official regulatory policies on Internet platforms and the education and training industry, saying that “there are some doubts in the market, and this sentiment has been reacted in the stock market.” It is also said that these regulatory policies “are not aimed at restricting and suppressing related industries, but are conducive to the long-term economic and social development.”
On the second day after the above article was issued, A shares and Hong Kong stocks rebounded.
Bloomberg News on July 29 quoted the analysis of Thomas Gatley, an analyst at Gavekal Research, saying that the intensity of regulatory suppression and public opinion may be reduced in the near future, but it does not mean that the official will stop. This movement to fully control the Internet platform, because politics is its priority.
Mark Po, an analyst at China Galaxy International Financial Holdings Co., Ltd. in Hong Kong, predicts that market sentiment will not completely calm down in the short term because the relevant policies are not clear, especially those aimed at Internet companies.
China Life Franklin Portfolio Manager Eddie Chia said that China (the government) may have reassure some investors, but it has already sent a message to investors that China (the government) can suppress any area that it sees as a threat.
Margaret Yang, a strategist at the financial website DailyFX, also believes that although mainland stocks and Hong Kong stocks rebounded on the 29th, investors have determined that there are risks in the supervision (of the Chinese government), and many investors who have suffered losses may take advantage of the rebound to sell.
RMB depreciation sharply
When the stock market fell sharply, the renminbi depreciated sharply. On the 27th, both the onshore and offshore renminbi hit a four-month low in intraday trading. Fiona Lim, a senior foreign exchange strategist at Maybank, believes that the depreciation of the renminbi will further cause concerns among US investors, who may therefore sell renminbi assets.
Radio Free Asia quoted the analysis of Feng Chongyi, an associate professor at the University of Technology Sydney in Australia on the 29th, saying that the Xinhua News Agency’s report is undoubtedly intended to appease people at home and abroad.
He said: “It’s hard to say whether they can achieve the goal. Because now there is a chilling effect. There are several companies whose market value has evaporated by 80%. People in the industry know how their (economic growth) figure was made. They The publication of these figures has no effect on the industry.”
Editor in charge: Sun Yun #
.