Whether by coincidence or design, Beijing is unveiling new stock market reforms just as China Evergrande Group’s spectacular plunge reminds investors why just such reforms are so badly needed.
On August 27, futures markets telegraphed a surge in the CSI 300 Index on reports that Chinese leader Xi Jinping’s team is rolling out a series of measures to cheer equity investors, including cuts in stamp duties on trades, lower deposit ratios for margin financing and a more selective process for executing initial public offerings (IPOs).
After opening 5.5% higher on the weekend news while markets were closed, the CSI 300 Index of mainland stocks yielded its gains to close just 1.2% higher on Monday (August 28) as foreign funds accelerated their selling over the day.