Stock Market plunge and investor’s nightmare

August was tough and being assigned two writing tasks was a welcomed distraction. I was able to collect reactions from the locals and report on how Chinese investors view the stock market meltdown. What a disaster! Investing in the stock markets is gambling and well… suicide. In China, where many invisible hands illegally move the stability of the national market, it is not the place for the ill-informed and the faint-hearted.  

It is never easy to interview people on the streets. After 30 or so rejections, I do thank the four gentlemen for their incredible patience and support.

Nightly Business Report – Chinese investors: How we see stocks

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“There is nothing to worry about since I’m used to this stock market drama. It’s more that I have no confidence. I have no confidence with regards to the future of our capitalist market … Even though the national team had tried to save the stock market countless times, the average investor isn’t really too satisfied with the solution, nor were the measures that effective.

[But] I feel that our country will continue to take actions and have policies in place to ease the pressure since the Chinese government will not ignore the peoples’ concern … If you have enough money then, yes, many investors will still pay attention to stocks and see whether they will invest in it or not.”

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Zhou Youqing

I feel that a country needs to follow the laws of the economy instead of jumping in to find the solution. Such enthusiasm cannot overtake what the economic law dictates. So you need to obey the economic laws. If the stocks are high then it will no doubt drop.

No one country in this world can have the capacity to save the stock market. This is impossible … I can understand why investors are worried but no one can save this unreasonable investment frenzy. It is not right to think that someone will be there to solve problems relating to bad investment choices … I feel that if the stock market drops then let it drop. It might pick itself back up. If everyone tries to think of ways to save the market then well, not everything can be saved.”

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“I feel that given the current status of the stock market, you need to stay put, observe and have patience … If the market drops for more than 1,000 points with no positive signs then our government should initiate policies to save the market. It’s not just limited to China, the U.S. does it too … Perhaps some of the government policies are not exactly perfect but you can’t say that their actions are wrong.

In the long run, I have a positive view of China’s economy and our country’s stock market.”

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“Last Friday, I could already predict that the stock market won’t be too positive. Things are not normal right now … If you look at the stock market in the long term, then there will still be opportunities, it’s just a temporary thing since from earlier this year, it hasn’t been normal but there are still chances.

The country’s support in the market is only a temporary boost, a phase. How the market is by itself is important in the long run. The national team is always trying to save the market, it is good news but its effect is limited.

I feel that now, you need to carefully guard your eggs in your basket … I am optimistically careful as an investor. From the internet, I feel the stock market isn’t doing well worldwide, it’s not just a China phenomena.”


Markets are like a cheating boyfriend: China investors react

China’s stock market is like a cheating boyfriend: You keep on trusting him but each time you’re disappointed. This was just one of the anguished comments posted on Weibo, one of China’s most popular social media platforms, on Monday as the country’s indices plunged again, in the latest dose of extreme volatility endured by mainland investors.

More than 92 million Weibo users clicked on some 99,000 posts tagged #Mondaystock, with one of the most “liked” posts, from a writer with the username 3271755890, likening the Chinese stock market to a cheating boyfriend.

“You keep on trusting him and believe that everything will turn out fine. But, every time he disappoints and hurts you and breaks another new record,” 3271755890 wrote.

Other Weibo users posted that they had “lost all hope” of the market righting itself, and that the latest rout was “the start of China’s financial crisis,” while others called for corrective action by regulators and retribution for market manipulators.

A user called Laopuerchake wrote: “Some will say that today’s A-share market is affected by the global market and the global market is affected by the A-share market so what you see is this cycle. It’s never-ending. Perhaps now, our China Securities Regulatory Commission will say the same thing that they’ve always said: it is completely normal. Sigh!”

Following the announcement on Sunday that China’s State Council, or cabinet, would allow local pension funds to invest up to 30 percent of their net assets in the country’s stocks, equity funds and balanced funds, some Weibo users professed concern at the prospect.

A user called Yiqushiyinian posted: “Why is it that our country is allowing pension funds to access the stock market now at this particular time? It’s done with a purpose and I am scared.”

The Shanghai Composite fell more than 9 percent in intraday trading before closing down 8.5 percent on worries about the economic health of the world’s second-largest economy. The smaller Shenzhen Composite lost 7.7 percent, while the CSI 300 index, made up of 300 A-share stocks listed on the Shanghai and Shenzhen exchanges, dropped 8.5 percent.

The Shanghai index, which had rallied some 60 percent between January and June, has now lost all of this year’s gains.

“It is a key moment for China, with the equity market in free fall, the banking system increasingly starved of liquidity, rising capital outflows, and a rapidly slowing economy,” IG’s market analyst Angus Nicholson wrote in a note.