No end in sight to the selling

The Chinese stock market is once again creating panic around the world.

Shanghai, China
Source: Bloomberg

It has been the worst start to the year for Chinese equities for two decades and the week isn’t even over yet. The latest twist in the plot has been Chinese regulators deciding to dispense with their new circuit breaker system.

Having now been triggered into action twice in the first four days of the year, the inability to trade while markets are suspended looks to be creating even more panic than markets being left to their own devices. Throw into the mix that the yuan has continued to be devalued and you have the right mix to send Chinese investors running for the exit.

As human nature dictates the desire to do something only grows stronger when prevented from it, it will be interesting  to see how the markets behave without investors fearing they will be trapped on Friday.

After six years Mark Bolland has announced he will be leaving Marks & Spencer in April. He does so with a share price at a premium from when he took control, but the business is still struggling to get the most out of its clothing department despite several re-inventions during his time in charge.

Saudi Arabia's need for spare change has been clearly highlighted, as the deputy crown prince hints that the government will list Aramco, the world's largest energy firm. Such a move would mark a significant change for the global oil market, and potentially spark off a round of corporate activity that could produce some interesting results.

In a role that non-farm payrolls will feel unaccustomed to, it will be playing second fiddle to Chinese market travails on the first Friday of the year. Now that the starting gun for US interest rate rises has already been fired, there will be less scrutiny on its ability to de-rail the process of interest rate normalisation. 

IGA, may distribute information/research produced by its respective foreign marketing partners within the IG Group of companies pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the research is distributed in Singapore to a person who is not an Accredited Investor, Expert Investor or an Institutional Investor, IGA accepts legal responsibility for the contents of the report to such persons only to the extent required by law. Singapore recipients should contact IGA at 6390 5118 for matters arising from, or in connection with the information distributed.

This information/research prepared by IGA or IGA Group is intended for general circulation. It does not take into account the specific investment objectives, financial situation or particular needs of any particular person. You should take into account your specific investment objectives, financial situation or particular needs before making a commitment to trade, including seeking advice from an independent financial adviser regarding the suitability of the investment, under a separate engagement, as you deem fit. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. In addition to the disclaimer above, the information does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. Any views and opinions expressed may be changed without an update.

See important Research Disclaimer.