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Renminbi series - China’s regulations kill world’s biggest futures market

It may not sound nice but a fact -Chinese authorities have got it all wrong, when it comes to markets. Even after abolishing a USD/RMB peg in way back almost a decade ago, they are still managing it. Making Renminbi move from defacto peg to peg.

Though this managing Yuan, still hasn't blown up to the mangers' face, thanks to cushion of high level of foreign exchange reserve (depleting fast but still at $3.58 trillion), equity market has as a matter of fact.

Authorities' effort to manage the drop in country's equity index, hasn't yield much of a result as China's benchmark stock index, Shanghai Composite is down 40% from June.

Chinese authorities, in their most sincere efforts to micro-manage market has lost more than actual gains.

China's most traded blue chip index, CSI 300's futures' market became the biggest in the world by volume, as shown in figure from Bloomberg.

However, Chinese Authorities thought selling future is unpatriotic, and sharpened their probe on companies and fund managers.

Naturally, world's biggest future market drops dead, with volume falling close to nil.

 

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