China eyeing foreigners to tame equity volatility

Shanghai

FOR most emerging markets, the arrival of foreign equity investors is a harbinger of increased volatility. In China, opening up may be just what the country needs to tame the biggest stock swings in more than five years.

The US$4.6 trillion market, where individuals account for about 80 per cent of trading, has turned into the most volatile worldwide after Greece as local traders speculate on prospects for increased central bank stimulus. The benchmark index surged 2.9 per cent on Wednesday, erasing an early decline of 1.7 per cent.