Good Evening,
As announced yesterday more so informally. We are now understanding the actions with a little bit more information. Today/Yesterday the Chinese have launched a vehicle/bank/company (please delete as you feel appropriate), that will buy stocks to stabilise the market.
Similar to what the Chinese Government did with bad loans strangling Chinese banks almost 12 years ago, they're now repeating the same tactics with the supermarket. Apparently the bad debts / new bad bank was hailed a success because it only lost half the money it "invested",
From what we have understood so far, the remit is so loose its creating significant uncertainty on the market. The policy has not been explained fully, perhaps the Chinese Government does not know yet but what most grasped yesterday is only half of it, "unlimited liquidity" (無限的流動性). Whether this "Unlimited Finance Entity" buys companies that are suspended and wraps them up or just the stock of the seller is unknown as of yet. The policy and remit will be announced formerly next week.
The ramifications, "liquidity" and overall confidence in China by their own people will be felt for a very long time to come. With the knee-jerking to cash under the mattress for quite a few, the property sector may suffer further pain. As a result, loan approvals have plummeted over recent days, and the PBOC are looking at injecting another round of cash into the banks to cover short-to-medium-term financing requirements, with a rather loose set of criteria for approval attached.
Interesting all the same!
Atb Fraser
Thanks for the cruddy commentary Fraser!! Just caught ML, a lot of info thanks inc. CEY cheers Leggie. I think GKP is a profit warning wrapped in hope. Any sale will have to consider gkp earnings. Safe travels & thanks Li a lot of hard work. Morris
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