As global capital trickles back toward China, policymakers are using tougher enforcement and cooling measures to slow the market’s pace in order to strengthen its appeal in the long term, reports Reuters.
With fund managers now seeking to diversify away from dollar-heavy portfolios, Beijing’s calibrated approach could help reverse years of retreat when some investors even called the country “uninvestable”.
Broader cooling efforts include tightening margin financing rules, curbing high-frequency traders’ access to exchange data, and curtailing stock-picking “influencers.” Sovereign funds, meanwhile, have pared back equity holdings. “The art of the slow bull is in effect,” fund consultancy Z-Ben Advisors said. The market is entering a self-sustaining cycle as “dynamics suggest a growing level of confidence in market depth from regulators and investors alike.”