China’s stocks fall as Greenspan comments on bubble
It seems even in retirement, Alan Greenspan needs only to open his mouth for the world markets to go into a fit. He has now given his voice to the growing chorus of analysts voicing their concern at the bubbling Chinese stock market. No sooner had he said this, that the markets in Shanghai and Shenzhen began to fall, well, at least it seemed like that. Many having been voicing their concern of the stock bubble and the downturn could be mere coincidence. As Bloomberg reports:
China’s stocks fell from a record after former Federal Reserve Chairman Alan Greenspan said he was concerned that Chinese equities might undergo a “dramatic contraction.” Daqin Railway Co. and Shenergy Co. paced declines among some of the biggest companies.
“The fact that Mr. Greenspan, a highly regarded, esteemed personality has that opinion, gives the bear China stock view much credibility,” said Desmond Soon, who helps manage $300 million of debt at Pacific Asset Management Co. in Singapore.
Brokerages including Citic Securities Co. gained after news the government will lift the ban on foreign investment in securities companies.
The benchmark CSI 300 Index, which tracks yuan-denominated A shares listed on China’s two exchanges, fell 17.28, or 0.4 percent, to 3921.67 as of the 11:30 a.m. local-time break. It earlier swung between gains and losses.
Speaking to a conference in Madrid by satellite, Greenspan said the rally in Chinese shares “is clearly unsustainable.”