Short selling allowed in Chinese market!

Short selling allowed in Chinese market!
Oct 6, 2008 02:19
JIMMYB Points: Join Date: Feb 7, 2007 Status: offline	CSRC announced yesterday that a long-planned reform in Chinese stock market would be launched, that is, margin trading and short selling of shares would be introduced to Chinese market. This sounds unreasonable. Because of US credit crisis, many countries have forbidden the investors to sell short of shares. You know what the result will be if the investors sell short of shares. However, China didn't follow US, UK and other countries. On contrary, it allows the investors to sell short of shares. According to CSRC, "margin trading and short selling would put more information into equity market prices, boost liquidity, provide a new tool for risk management and provide a new source of business for brokerages." Do you think it will work as the regulators expected?

Oct 6, 2008 02:19

JIMMYB
Points:
Join Date: Feb 7, 2007
Status: offline

CSRC announced yesterday that a long-planned reform in Chinese stock market would be launched, that is, margin trading and short selling of shares would be introduced to Chinese market. This sounds unreasonable.

Because of US credit crisis, many countries have forbidden the investors to sell short of shares. You know what the result will be if the investors sell short of shares. However, China didn't follow US, UK and other countries. On contrary, it allows the investors to sell short of shares. According to CSRC, "margin trading and short selling would put more information into equity market prices, boost liquidity, provide a new tool for risk management and provide a new source of business for brokerages."

Do you think it will work as the regulators expected?

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