Chinese prop on the stock markets benefits the speculators

Chinese authorities gradually shrinking volumes for interventions in the capital market. Yesterday SSE Composite declined by -6.2%, today still with -0.77%. This decline of the index value back to the February levels. The support from the authorities so far is estimated at over $ 120 billion. That seems so far benefited only some speculators. Support is implemented by the China Securities Finance Corp., which received from Government а special powers and according to Reuters, have to deal with unrestricted most affected shares in order to regulate the equilibrium price. This procedure was carried out in huge volumes almost always in the last 30 minutes of trading sessions. This  supports indexes thus closed with an increase. This strategy, however, was very visible and cause mass replication of the transactions of CSF from other participants and ultimately collapsed confidence in the neutrality of the exchange procedures.

Goldman Sachs published its analysis to evaluate the volumes of interference in order to impact on prices of around $ 120 - $ 145 billion. (800-900 billion yuan). In this regard, the IMF last week recommended Beijing to stop Exchange interventions and anti-market impact on price indices.