Repeat of 2015 China stock market turmoil will shatter global investors’ confidence, says FTSE’s Jessie Pak
- Massive trading suspension cannot happen again as global investors have a higher exposure to A shares, says Jessie Pak, managing director for Asia at FTSE Russell
- Second phase of FTSE Russell’s inclusion of 1,093 mainland listed shares into its indices will be completed on September 23
China must stay alert to the possibility of a severe market disruption in case the trade war deteriorates further, as a repeat of the 2015 sell-off will shatter the confidence of international investors, said Jessie Pak, managing director for Asia at FTSE Russell.
“The trade war is high up [there] … [but] it does not necessarily make the Chinese market scary to international investors because the market is volatile everywhere,” Pak said, adding that any massive disruption and suspension of shares from trading similar to four years ago will drive international investors away.
The move arrested the fall of stock prices, but also trapped investors, as they could not make a timely exit.
The benchmark Shanghai Composite Index on Tuesday stood at 3,021.20, nearly 42 per cent off its peak of 5,166.35 reached on June 12, 2015.
