DB 德银：中国宏观策略－关于昨日A股调整

6P　02.27 English

Triggers of the correction
We think yesterday’s 9% drop in Shanghai A share index—the largest single-day decline in ten years--and a 3% fall in the H share index were partially explained by the following concerns among market participants:
1) Feb CPI inflation is likely to be as high as 3% yoy and the PBOC is likely to raise rates in response to the Feb CPI figure;
2) The govt couldl form a special task force within CSRC to investigate into illegal securities operations;
3) The govt may adopt further measures to crackdown on illegal fund flows (bank lending and foreign funds) to the stock markets;
4) A capital gains tax is likely to be levied on stock transactions soon;
5) CSRC chairman Shang Fuling may not be in his position much longer