For the past three years Chinese investors have been putting money into snowball derivatives. These are quite complex and have an upper financial limit (knock out limit) and a lower financial limit (knock in limit). As the stock market slumps and the knock in price is reached the contract is terminated and a loss crystalized. Quite a weird investment that promised returns of over 15% - this should have flagged it up as high risk. There is now a danger of massive losses:
To help stabilise the stock market the Chinese government is going into the market to buy shares and force prices up:
From the article:
More than 30 Chinese-listed companies unveiled share buyback and purchase plans over the weekend while major mutual fund house E Fund Management said it would invest in its own product.
Invest in its own products – that sounds like a plan