What happened, dear readers? When did it all go so wrong? For weeks, months, nigh on half a year Shanghai’s beauteous bourse sailed along like a clipper ship with a tailwind and a couple of rockets strapped to hull. The Shanghai Composite Index seemed destined for eternal ascension. But now? Down 7.4%? In a day!? Where has all that previously willing hot money gone?
Perhaps it went into the real economy? After all, not one, but two independent surveys suggested a possible, mild, semi-rebound for China’s economy this week. A stock price fall tracks with previous trends, where shares rose on bad news for the economy. Still, we’d have hoped that the arrest over the weekend of an official at China’s securities regulator would have given a shot in the arm to retail investors eager for a government signal that the rally must go on.
Maybe it’s going into the lottery? But then this week a probe found that 40% of the roughly RMB104 billion in lottery revenue from last year couldn’t be accounted for. While we’re all for taking a gamble, even in the face of tall odds, we’re can’t imagine even China’s often inscrutable retail investors deciding that a deck so stacked could deal them a favorable hand.
About the only thing we’re certain of is that wherever the money’s going, it isn’t headed into new accounts at the new Alibaba-backed online bank that launched this week. Indeed, by all accounts MYbank would love to loan out millions to needy small businesses as well. Certainly its chief stakeholder, the (also Alibaba-backed) Ant Financial has the cash on hand—the firm’s latest round of funding supposedly valued the company at over $40 million.
But seeing as how the government hasn’t approved the facial recognition tech needed for users confirm their identity and open a MYbank account, this week’s launch might have been a tad premature. We just hope the bank isn’t planning to use Alibaba’s cloud hosting services to store all the financial information they’ll no doubt accrue once things are up and running. We understand their data centers have been less than dependable of late.
Maybe Jack Ma’s giant will have more luck with its billion-dollar investment in a delivery scheduling service. After the Shanghai Composite Index’s implosion this week there will no doubt be plenty of willing customers out there looking to order in a little comfort food over the weekend. Just steer clear of ordering any meat online—we’ve heard rather unappetizing things about the sell-by dates.