China is probing the activities of hedge funds that use quantitative trading strategies to bet against its struggling stock market, according to Reuters.
The country’s Securities Regulatory Commission has reached out to several major brokerages to ask about the trading strategies being deployed by some of their clients, the publication reported early Thursday, citing sources with direct knowledge of the investigation.
Those dismal returns have sparked social-media outrage and led to top investors and retail traders alike questioning the strategies used by both quant funds and short sellers.
As well as pushing back against these trading strategies, policymakers halved the stamp duty that investors are required to pay when trading stocks last month in a bid to revive China’s stagnant markets.
Beijing has also instructed top economists not to discuss issues like deflation, faltering growth, or slumping exports in a bid to prevent them from painting the country in a bad light, according to the Financial Times.
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