Week of Letdowns as Xi Speech, PBOC Fail to Lift China Markets

(Bloomberg) -- As the year winds down with a deepening sell-off, equity investors hoping for a last-minute revival were disappointed as a highly anticipated speech from President Xi Jinping and fresh monetary support from the central bank failed to boost markets.

The CSI 300 gauge of large-caps on Friday headed for a sixth-straight loss and its lowest close since March 2016, closing out the week after Xi’s speech on four decades of reforms didn’t mention specific policies to lift China’s flagging economy. The Shanghai Composite Index traded at its lowest in two months.

The People’s Bank of China late Wednesday announced fresh monetary support measures, including supplying lower-cost liquidity, but that also failed to spark any kind of rally in equities. Compounding matters, the Federal Reserve’s rate increase and outlook rattled markets in China and elsewhere.

$35.7 billion

It’s been a mixed year for Hong Kong’s IPO market. On the one hand, a boom in technology listings propelled the city to the top of global rankings in deal value. On the other, those debuts turned out to be the lousiest in a decade.

Companies that raised at least $100 million dropped 6.2 percent in their first month of trading on average, the worst return since 2008, according to data compiled by Bloomberg. Efforts by the local stock exchange to encourage more tech listings, including allowing dual-class shares, have worked as new-economy firms accounted for more than 40 percent of Hong Kong’s proceeds this year. Unfortunately, it’s come at the same time as a slide in the biggest tech names around the world.

“Technology companies fear an industry downturn will get worse if they don’t go public now,” said Liang Jinxin, a strategist at Tianfeng Securities Co.

Chart of the week

China injected liquidity into the banking system with open-market operations for the first time after a 36-session hiatus. Read more here.

Elsewhere

Here’s what else has caught our eye.

• The losses are getting downright bloody for this stock.
• Citigroup is said to be facing a $180 million loss on Asia fund loan.
• Drugmakers have had a rough week.
• The latest on an ex-Canadian diplomat detained in China.
• Tencent spikes on reports China has resumed gaming approvals.
• This short-seller is on the hunt for “100 percent downside.”
• A QuickTake on why China wants free markets -- but not too free.
• China mutual fund closures just hit a record -- here’s why.
• A ray of light for China’s solar makers.

To contact the reporter on this story: Eric Lam in Hong Kong at elam87@bloomberg.net

To contact the editors responsible for this story: Christopher Anstey at canstey@bloomberg.net, Will Davies, David Watkins

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