PBOC limits bank drawings to curb illegal punts on HK stocks
Mainland authorities are limiting cash withdrawals from Shenzhen banks in an attempt to stem a flood of illegal funds into Hong Kong, particularly those flowing to the city's supercharged stock market.
Billions of yuan are believed to have been pumped into Hong Kong stocks through underground channels over the past few months as mainland investors seek to ride a bull market that has sent the Hang Seng Index to record levels.
The crackdown on bank withdrawals is a sign Beijing is getting increasingly nervous about an exodus of funds from the mainland that could destabilise the world's fastest-growing major economy.
Officials have stalled a programme that would allow mainlanders to invest directly in Hong Kong shares because of fears it could cause a flight of capital.
Investors betting on a tidal wave of money flowing south have pushed up the Hang Seng Index, which closed yesterday up more than 39 per cent from its level on August 20, when the so-called 'stocks through-train' was announced.
