China is in a tailspin.
Chinese shares are still down despite a raft of fresh government measures to prop up the market including ordering state-owned firms not to sell stocks and instead they were encouraged to buy, while the insurance regulator relaxed the equity investment rule for insurers. As the market remains hostage to bears, the number of Chinese firms that sought trading suspension of their shares in Shanghai and Shenzhen bourses rose Wednesday and now accounted for nearly half of listed companies, according to media reports.
A Goldman Sachs strategist, meanwhile, said in a Bloomberg interview that the Chinese stock market “is not in a bubble yet” and predicted a rise in the CSI300 index for the next 12 months. Read on…
Chinese shares continue downward trajectory. The Shanghai Composite Index closed down 5.9% to its lowest in four months, dragging along the Hang Seng Index, which was last seen 8% lower. China’s three futures index also plunged, as investors were “extremely bearish on all type of stocks.” Reuters/The Wall Street Journal (paywall)
Buyout deals worth $25 billion for U.S.-listed Chinese firms may not push through. With tumbling prices, shares of at lease 23 U.S.-listed firms that were the target for buyouts were trading at an average of 22% below their buyout offers, “indicating investors are becoming more skeptical the deals will go through.” Bloomberg
Forty percent of Chinese firms with $2.6 trillion in market cap suspend trading. At least 1,323 Chinese firms shut down their stocks. Firms listed in Shanghai and Shenzhen sought trading suspension amid the downturn in the country’s equities market, which has erased $3.2 trillion in value. Bloomberg
Japan posts 11th straight monthly current account surplus. In May, the surplus reached 1.88 trillion yen ($15.3 billion), beating the 1.57 trillion forecast of a surplus. Direct and portfolio investments flowing into the country were among the main drivers for the healthy current account position. Financial Times (paywall)
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