As Chinese equities continue to drop, while the economic outlook is not looking up, cash is certainly king in the mainland right now. This is the reason why there is pressure on investors to unwind their holdings, with some rich Chinese cutting their stock holdings, contributing to the downturn.
Shanghai Chaos has closed its entire position in copper, according to Financial Times (paywall), and as a result the firm’s unit was no longer part of the top 20 holders of short copper contracts last Friday.
FT said it was not clear whether the firm’s decision to exit from copper was part of a trading strategy or there was a pressure to return money to investors.
Chinese shares have been falling since middle of last month on tighter margin rules, forcing investors to unwind their exposures, and as the Greek debt saga unfolded, which culminated at last Sunday’s referendum that turned down the bailout package.
Since the June 12 peak, the Shanghai Composite Index has lost more than 25%.
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