SHANGHAI: China’s main stock indexes were little changed on Friday but posted worst month of the year on fears that regulators will step up their latest crackdown on riskier types of financing and speculation, and on lingering worries over economic growth. While China’s regulatory enforcement has tended to wax and wane in the past, investors fear there may be no let up in the latest campaign after President Xi Jinping made a rare speech this week on financial stability. Xi called on Tuesday for increased efforts to ward off systemic risks to help maintain financial security, the official Xinhua news agency said. “We think it sends an important signal to support the ongoing tightening of financial regulation and enforcement,” Citi wrote in a recent note.
The blue-chip CSI300 index fell 0.2 per cent, to 3,439.75 points, while the Shanghai Composite Index edged up 0.1 per cent to 3,154.66 points. For the week, the CSI300 fell 0.8 per cent, while SSEC lost 0.6 per cent, both down for the third straight week. For the month, the CSI300 was down 0.5 per cent, while SSEC lost 2.1 per cent.
Chinese fund managers have trimmed their suggested equity exposure for the next three months to the lowest in 6 months, according to a monthly Reuters poll. Sustained efforts by authorities to wring excessive leverage from the system could tighten liquidity and sour investors’ sentiment further, said Zhang Gang, an analyst with China Central Securities, while adding he did not see further substantial losses for stocks.
