Is the Chinese equities market disconnected from the economy? Before the rout that began middle of last month, Chinese shares were rallying, surging to seven-year peaks even if analysts and economists said their performance was not backed by economic fundamentals, thus the series of warnings about a bubble.
Today, shares fell for a second straight day even after the government announced GDP rose 7% in the second quarter from the same period in 2014, beating forecasts. The Shanghai Composite Index ended the day down 3%, while the CSI300 Index slipped 3.5%, after falling as much as 5% earlier in the session, according to Reuters.
Meanwhile, troubled Hanergy was ordered suspended by Hong Kong regulators, while Chinese property developer, which defaulted on its U.S. debt in April, plans to resume selling properties to boost its finances. Read on..
Hanergy Thin Film shares ordered suspended. The Hong Kong Securities and Futures Commission told the Hong Kong bourse to keep Hanergy suspended as the regulator continues its investigation on the firm. Shares of Hanergy were suspended since May 20, the day they plunged nearly 50% in less than half an hour. With the HSFC order, Hanergy could not resume trading even if it wanted to. Financial Times (paywall)
Kaisa Group set to resume property sales. The troubled Chinese developer, which defaulted on its U.S. currency debt in April, plans to hold sales at its three projects in Shenzhen as early as this month. The sales will help ease its financial problems. Bloomberg
Bank of Japan cuts growth, inflation forecast, maintains monetary expansion target. The central bank lowered its inflation target in the current fiscal year ending March 2016 to 0.7% from 0.8%. The GDP estimate was also lowered to 1.7% from 2%. It maintained its pledge to allow the monetary base to expand at an annual 80 trillion yen ($648 billion). Bloomberg/Financial Times
BOC Hong Kong selling banking subsidiary. Nanyang Commercial Bank (NCB) is being offered at 68 billion Hong Kong dollars ($8.8 billion). BOC will accept bids until August 25. Among the potential buyers include New China Life Insurance, Yue Xiu Group and China Cinda Asset Management. Reuters
Photo credit: Aaron Goodman via Flickr