China Stocks Roiled as Shanghai Composite Trading Surges

By Bloomberg News - Aug 16, 2013 4:17 PM GMT+0800

Chinas stock market was roiled by a 53 percent surge in trading volumes that sent the
Shanghai Composite (SHCOM! "nde# to its biggest intraday gain since March $%%&'
(verbright Securities Co' ()%*+,,! said it e#perienced a trading error'
-he benchmark Shanghai gauge .umped /rom a loss o/ as much as * percent to a gain o/ 5')
percent in two minutes during the morning session as *) o/ the measures $% biggest
companies by weighting increased by the *% percent daily limit' -he inde# /ell %') percent at
the close' -he e#change said trades will be settled as normal and (verbright said its
investigating'
-he biggest swings since the global /inancial crisis threaten to /urther erode con/idence in
whats already the worlds second0worst per/orming stock market a/ter 1reece during the past
/our years' 2bout *5'3 billion shares o/ Shanghai Composite companies changed hands3
versus the 3%0day average o/ *% billion3 data compiled by 4loomberg show'
5" havent seen things like this /or ages36Chen Shide3 a 1uang7hou0based money manager at
18 8und Management Co'3 which oversees about 9*)'+ billion3 said by phone today' 5-he
market sentiment will continue to remain weak'6
-he Shanghai Composite has dropped ,', percent this year3 versus a &'& percent gain in the
MSC" 2ll0Country :orld "nde#' -he Chinese gauge has tumbled about 3$ percent during the
past /our years as growth in the worlds second0largest economy slowed3 the most among
e;uity gauges in <5 emerging and developed countries a/ter the 5& percent decline in
1reeces 2S( "nde#'
Poor Sentiment
Chinese stock accounts containing /unds have dropped by more than $ million /rom their high
in =une $%** to 5<'< million3 according to regulatory data compiled by 4loomberg'
5Such a movement wont help to boost market con/idence36 said >i =un3 a strategist at Central
China Securities Co' in Shanghai' 5Most investors would view such a sudden spike in a
market with very poor sentiment as irrational and illogical'6
-he government restricts access to mainland markets through its ?uali/ied 8oreign
"nstitutional "nvestor program3 which has granted international /irms a combined ;uota o/
9<<'& billion as o/ =uly 3%' -hat compares with the 93'* trillion market value o/ locally0listed
companies'
-he Shanghai Stock (#change said operation o/ its trading system was normal today3
according to a statement on its o//icial microblog' Chinas securities regulator is monitoring the
situation3 said an o//icial at the China Securities @egulatory Commission3 who asked not to be
identi/ied because o/ the agencys rules'