A-shares drop amid panicky sell-offs
6 July 2007
Mainland shares continued to move down yesterday amid panicky sell-offs, the Economic Observer reported (in Chinese). The benchmark Shanghai Composite Index fell more than 200 points, closing at 3,615.87, as turnover volume further shrank. Investors worry about capital flowing out of mainland markets after the foreign exchange regulator said it would raise quotas for investment in overseas markets under the Qualified Domestic Institutional Investor program. Investors also fear that a large supply of new IPOs could soak up market liquidity. Some analysts were cited as saying a structural bear market is coming, but others argued the market's continued drop will leave it little room to fall.