Deutsche Bank: Chinese Stocks Are More Distressed Than During the Financial Crisis

Investors are pricing in a crisis.

With concerns about a hard landing in China playing the starring role in the risk-off environment that’s dominated so far in 2016, it’s no surprise that equities in the world’s second-largest economy have fared particularly poorly.

In local-currency terms, the Shanghai Composite is down almost 17 percent this year, far underperforming the MSCI World Index’s 7.5 percent retreat.

Continue reading

Will the Stock Market Crash in 2016?

China’s stock market crash on Monday triggered its first ever halt and rattled markets worldwide.

Japan’s Nikkei Stock Average lost 3.1%, Hong Kong’s Hang Seng Index fell 2.7%, and South Korea’s Kospi declined 2.2%. Continue reading

Chinese stock markets suspended after shares fall 7pc

The Shanghai and Shenzhen exchanges closed early after poor economic data triggered a sell-off

Trading on China’s stock markets ended early after steep losses triggered a new ‘circuit-breaker’ mechanism, installed to curb volatility.

The 7pc drop in China’s blue-chip CSI300 index prompted an automatic early closure of the Shanghai and Shenzhen stock exchanges on the first day of trading since the new safety measure was introduced.

Continue reading

Chinese Yuan Could Give the IMF “a Shock It Isn’t Prepared For”

 

 

On Monday, the Chinese yuan joined one of the most elite clubs on the planet: the International Monetary Fund’s Special Drawing Rights basket of reserve currencies.

CURRENCY OLD WEIGHT NEW WEIGHT
U.S. Dollar 41.90% 41.73%
Euro 37.40% 30.93%
Chinese Yuan 10.92%
Japanese Yen 9.40% 8.33%
Pound Sterling 11.30% 8.09%

*Source: IMF Continue reading

The really worrying financial crisis is happening in China, not Greece

China looks like it is heading for its version of the 1929 stock market crash

While all Western eyes remain firmly focused on Greece, a potentially much more significant financial crisis is developing on the other side of world. In some quarters, it’s already being called China’s 1929 – the year of the most infamous stock market crash in history and the start of the economic catastrophe of the Great Depression.

In any normal summer, a 30pc fall in the Chinese stock market – a loss of value roughly equivalent to the UK’s entire economic output last year – after an ascent which had seen share prices more than double within the space of a year would have been front page news across the globe.

Continue reading