On Thursday, the Shanghai composite index ended at 1390.5, down almost 50 points on the day and way below the 1500 market that for months has been touted as a powerful resistance point. The immediate cause was the reaction to China Merchants bank's plans to issue a huge RMB 10 billion $1.2 billion convertible bond and the aftermath of the almost RMB 6 billion IPO of Huaxia Bank.
The response by the authorities seems to be to focus on bureaucratic changes. The secondary offering issuance system, for example, has already seen some changes, and there are rumours the clogged up IPO system could also see some changes.
However, it is hard...
