(Reuters) – In his Hangzhou apartment in eastern China, Wen Hao had just finished his daily stock-raising video when he discovered he had been banned from Toutiao’s social media platform, days after he invited netizens to join his stock-recommending community.
In a country where internet trading activity and censorship are closely monitored, Wen, 35, believed his own blockade showed why the wholesaler could not put shares in a person- U.S. videogame GameStop sales more than 2,000% higher over two weeks occurring in China.
“It’s okay if you have a hundred followers,” said Wen, a self-employed investment advisor who monitors his stock recommendations daily through Wechat. “But if you ask thousands of followers to buy stock at once through social media in China, the police will visit you. ”
The GameStop rally grabbed the world market headlines for the way Reddit users’ slaves were taking over big short sellers and hedge funds.
Attempts to make that kind of drama in Asian sex markets so far are remote. There was a small online crusade to support manufacturers of gloves that were in short supply in Malaysia, and they are calling in South Korea to ban short selling.
But such selling cheerleaders have struggled to attract many of the following. The Chinese stock market once had a reputation for being a casino, but despite the country’s tight censorship, the absence of well-known short sellers and a general bias of not violating state directives hindered their efforts.
Dean Li, a blogger on Xueqiu.com, an investment community similar to Reddit, said the GameStop saga had shown “if a short seller has to make a betish bet against a listed company, it will be in trouble. “But both short selling and options trading, the main drivers of GameStop’s stratospheric rise, are constrained in China, making such a duel impossible, he said.
Huang Wei, founder of an online investment community that includes what he calls “top-rated investors”, said he was putting pressure on U.S. retail investors in their “turmoil”. against Wall Street short sellers, but in China, there is no reason for a retail investor revolution. .
“It’s a reflection of the value of people. It’s like farmers going against hostility, ”said Huang.
CHAN EIL NO MAO
“There’s not a lot of public dissatisfaction right now …. so you won’t see Che Guevara or Mao Zedong on the market,” Huang said, referring to the charismatic leaders in revolution. Cuba and China.
The chance of a Chinese equivalent of GameStop appearing is further reduced by recent capital market reforms aimed at weakening weak companies and encouraging long-term investment. Chinese regulators are also embracing internet price manipulation and stock recommendations.
The China Securities Regulatory Commission’s campaign last September examined illegal stock proposals, also targeting a “black market” that spreads false information to influence stock prices, as well as “apps” black ”, which attracts investment investors using chat groups on social media.
Chinese hedge fund manager Yuan Yuwei said the trading patterns seen in the new GameStop are not in China, or Hong Kong, where speculators have talked about stocks in pump-and-dump schemes.
“The pattern is the same. You drive up share prices and attract fans. And then, you dump your tenures to deceased people. The only difference is that you don’t have short or very few jobs (in China), ”he said, adding that by adding to these practices they have become much more common in China in recent years. end.
However, Nirgunan Tiruchelvam, head of consumer equality research at Tellimer, said he expected the sales frenzy to soon grow in Asia, including China.
“That could be a complete storm where you use these Robinhood-type platforms, as well as the spread of internet chat groups, as well as the very short names. . That would create a strong cocktail, ”said Tiruchelvam, who identified stocks including Chinese Literature and MTR Corp as potential targets. “This is really the beginning of such a huge wave of investment behavior.”
Edited by Vidya Ranganathan and Gerry Doyle