According to International Partners, stocks on mainland Chinese equity markets have resumed their slide following steep falls on their US counterparts at the end of last week.

The Shanghai Composite plunged by as much as 9% in feverish Monday morning trading as investors lost confidence in the ability of the Chinese authorities to arrest the economic slowdown in the world’s second biggest economy.

The resumption of conviction selling was further evidence of an end to the bounce Chinese stocks had enjoyed since the regulators intervened in markets in mid-to-late July.

“The intervention helped stop the selling temporarily but, with geo-political tensions between the two Koreas escalating and a Federal Reserve rate hike still evidently on the table, investors aren’t taking any chances” said Akiro Himata who leads Emerging Markets strategy at International Partners.

In a bid to reassure investors over the weekend, the Chinese authorities announced that they would allow state-controlled pension funds to invest in stocks for the first time, opening the door to potentially hundreds of billions of yuan pouring into the equity markets.

“They’re hoping that inward flows of cash will create enough demand to stop prices falling but it remains to be seen if this will have any effect,” he explained.

Monday’s sharp declines effectively erased all gains on the benchmark Shanghai Composite for the year but International Partners says it believes the Chinese authorities will take additional steps to instill confidence.

“The authorities are desperate to return confidence to the stock market because millions of middle-class, ordinary retail Chinese investors have seen billions wiped off their wealth. This could further undermine confidence among those who have lost jobs, lost money in real estate and in other investments,” concluded Himata.

About International Partners
International Partners understands that only a plan that's personally focused can help you navigate an investment environment that's become increasingly complex and volatile.

Their investment plans are designed to consider – among other matters – your short-term cash-flow requirements, time horizons, your retirement plans and any gifting or legacy aspirations you may have. Planning of this precision can only be effected by a personalized approach and this means that yours will be a tailor-made, bespoke plan that will be of no use to anybody else.

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Tokyo-to, Japan