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China moves to limit short selling as virus looms over market reopening

Stock MarketsFeb 02, 2020 12:41PM ET
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© Reuters. China moves to limit short selling as virus looms over market reopening

By Zhang Yan and Ryan Woo

(Reuters) - China has taken steps to limit short-selling activities as the country's financial markets prepare to reopen on Monday amid an outbreak of a new coronavirus, three sources with direct knowledge of the matter told Reuters.

The sources said China Securities Regulatory Commission (CSRC) had issued a verbal directive to brokerages including Citic Securities Co. and China International Capital Corp. to bar their clients from selling borrowed stocks on Feb. 3.

It was not clear if the suspension -- which was first reported on Sunday by Chinese media outlet 21st Century Business Herald -- would be extended beyond Monday, one of the sources said.

In an internal memo sent to its branches, Citic called the move a "political task" aimed at helping stabilize the market on the first trading day of the stock market in the Lunar New Year of Rat as the coronavirus outbreak unsettles global markets.

Investors are bracing for a volatile session in Chinese markets when onshore trades resume on Monday after a break for the Lunar New Year which was extended by the government.

China's policy makers have taken various of measures to protect the financial system from the fallout due to the outbreak. The central bank said it will inject 1.2 trillion yuan ($174 billion) worth of liquidity into the markets via reverse repo operations on Monday.

The CSRC is also considering launching hedging tools for the A-share market to help alleviate market panic and will suspend evening sessions of futures trading starting from Monday, it said.

China moves to limit short selling as virus looms over market reopening
 

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Comments (6)
Fernando lopes
Fernando lopes Feb 02, 2020 5:43PM ET
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Are you guys kidding this Virus has just started and kills 3 percent of people infected. Flu kills 1 in 10,000. Their is no comparison. This isl THE Epedemic. Be kind and Nice to your Loved ones and even strangers good Luck.
Fernando lopes
Fernando lopes Feb 02, 2020 5:43PM ET
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Are you guys kidding this Virus has just started and kills 3 percent of people infected. Flu kills 1 in 10,000. Their is no comparison. This isl THE Epedemic. Be kind and Nice to your Loved ones and even strangers good Luck.
Marcelo Leslie
Marcelo Leslie Feb 02, 2020 5:06PM ET
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Do you really think that every country in the world would be repatriating their citizens and stopping all travel to and from china for a run of the mill infection??? They just dont tell the truth to aviid panic.. but its obvious this thing is major
hhg nguyen
hhg nguyen Feb 02, 2020 1:38PM ET
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the regular Flu kills around 8000 in a VERAGE Flu Season... CoronaVirus has only killed 300 ...so its all hype... SARS epidemic only killed 300 TOTAL ... whats wrong with this picture???  This has to do with keeping protesters at home in Hong Kong and its working.
Michael Jones
Michael Jones Feb 02, 2020 1:08PM ET
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something about this just feels wrong. more people die from the normal flu each year and its barely mentioned. something else is going on here and I don't think it's good.
Kelvin Lada
Kelvin2020 Feb 02, 2020 1:08PM ET
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There's something called motility rate. Every year, several billions of people catch the common flue, and several millions die, meaning the mortality rate is less then 1/1000. But other deadly viruses infect only sever thousand people and kills several hundreds, meaning a motility rate of /100, under extremely uncontrolled scenario. If not controlled, those deadly viruses can ********hundreds of millions of people over a short period of time.
William Smith
William Smith Feb 02, 2020 1:08PM ET
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It's looking like there have been about 11% fatalities in the early cases that have run to their ending, compared to 1/1000th death rate from common flu.
William Smith
William Smith Feb 02, 2020 12:55PM ET
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Just shows how under reported the real number of cases are. You dont do all China is doing for 14000 viral cases. Going to get ugly.
TW TW
TW TW Feb 02, 2020 12:55PM ET
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Its more than ugly. There was an earthquake in Chengdu, Sichuan, China.
Jason Patcher
Jason Patcher Feb 02, 2020 12:55PM ET
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they can only test so many samples a day. "1400 confirmed cases" but yes the actual amount is much bigger... everyone knows that. so how many are actually infected? is very difficult to tell for a variety of reasons but is it x5 x10 x100 x1000- hard to know
 
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