Shanghai based BNP Partners says Chinese authorities’ endeavors to stabilize the country’s stock markets appear to have failed and, according to Shanghai-based investment manager and broker, BNP Partners, the chaotic volatility could do irreparable damage to the perception of Chinese markets among investors, foreign and domestic.

Sharp falls that have seen the Shanghai and Shenzen Composites lose more than 30% of their value since the mid-June peaks have forced Beijing to intervene with support measures including the suspension of new IPOs, a partial easing of margin trading rules and a move by the People’s Bank of China to inject liquidity into the state-backed margin financing company.

“Blanket intervention of this nature is morally hazardous but we can understand why the authorities are doing it,” said Cole Denning, Chief Investment Strategist at BNP Partners “Many so-called “Mom & Pop” investors came in on the tail-end of the boom in equities. Many of them bought in through brokers using margin products they simply didn’t understand and the selloff is serving to magnify their losses,” he explained.

Beijing is deeply concerned that the credibility of both the equity markets and their own ability to mount effective interventions will be damaged if small, retail investors’ losses continue to mount.

BNP Partners says it believes stocks have fallen well into oversold territory but warned clients of the propensity for selloffs to overshoot significantly to the downside.

“We recently warned against trying to catch a falling knife and clearly, that was sage advice but there is a good chance that the selling is coming to an end,” concluded Denning.

About BNP Partners:
At BNP Partners, they define effective wealth management as an overall strategy that seamlessly integrates their clients’ personal ROI (return-on-investment) aspirations with their investment management prowess.

Whilst today’s markets can often demonstrate the type of characteristics that have served to hamper the efforts of many traditional investment methodologies to secure the returns they once did, BNP Partners continue to secure exceptional returns for their esteemed clients utilizing a meticulously applied combination of those same traditional methods whilst diligently complementing them with new, pioneering techniques.

Contact BNP Partners:
1/F, Jinzhong Mansion, 98,
Huaihai Middle Rd.,
Shanghai, 200021
Phone: +85258083924
Email: [email protected]
Web: http://www.bnppartners.com