Forced Buy-Ins Spark "Liquidity Crisis" In China's 'Nasdaq'

Zero Hedge | 10/16/2018 | Staff
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Marking the worst year since 2008, China's tech-heavy (Nasdaq-equivalent) Shenzhen Composite index is down a shocking 35% year-to-date, and it's starting to become a self-feeding vicious circle...

As Bloomberg reports, the most recent slump in the teach-heavy index comes despite regulators' efforts to rein in risks of share-backed loans following reports over the weekend that insurers are being 'encouraged' to invest in listed companies to reduce liquidity risks connected to such loans.

Share - Pledges - Company - Founders - Investors

Share pledges, where company founders and other major investors put up stock as collateral, have emerged as a pressure point in China’s debt-laden economy, especially as the stock market tumbles.

“There’s a liquidity crisis in the stock market, and pledged shares are again starting to sound the alarm,” said Yang Hai, analyst at Kaiyuan Securities Co.

Stocks - Shenzhen - Brunt - Loss - Confidence

"Stocks in Shenzhen typically bear the brunt of loss of confidence in the stock market because of their higher valuations.”

Bloomberg additionally...
(Excerpt) Read more at: Zero Hedge
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