Closing Bell 28th August: China’s Stock Surge, Evergrande’s Plunge, and Australian Retail Sales Beat

Boost in Chinese Stock Market Following New Regulatory Measures

Chinese stocks experienced a significant surge following the introduction of several measures aimed at attracting investors. Among these measures is a reduction in the stamp duty on stock trades and a deceleration in the rate of initial public offerings. The CSI 300 Index witnessed an impressive rally, marking its most significant rise in three years. Additionally, the Ministry of Finance announced a drop in the levy charged on stock trades, marking the first such reduction since 2008. The China Securities Regulatory Commission also indicated its intention to slow down IPOs in light of recent market conditions. In a surprising move, regulators imposed restrictions on share sales by major stakeholders in companies whose stock prices have plummeted below IPO or net asset levels.

Dramatic Decline for Property Developer China Evergrande

China Evergrande Group, a prominent property developer, saw its stock value plummet by 87% as trading resumed in Hong Kong. This comes after a 17-month trading halt. The company, known as the world’s most indebted, reported a staggering loss of $4.5 billion in the first half of the year, following an extensive debt restructuring process.

Positive Turn for Australian Retail Sales in July

Australian retail sales witnessed a 0.5% increase in July, surpassing the anticipated 0.3% gain. This positive trend comes after an unexpected decline in the previous month. Despite the rise in July, Ben Dorber, ABS head of retail statistics, noted that the underlying growth in retail turnover remains modest. When compared to July 2022, the growth rate stands at a mere 1.9%, even with significant price growth over the year.