RIDGEFIELD, Conn., July 30, 2015 /PRNewswire/ -- Stephen Hicks, Founder and CEO of Southridge Capital, a diversified financial holding company specializing in direct investment and advisory services to small and middle market companies, has released a statement about the state of China's stock market in recent months and especially this week.
The Shanghai Composite Index lost 30 percent of its value over a three-week period starting in mid-June. After a modest rebound, it plummeted again this week, posting its largest single-day loss in nearly a decade. This despite the government of the People's Republic of China trying to stem the decline in the markets through intervention. This volatility has caused some amount of panic that China's woes could spur a global sell-off.
Hicks warns against such speculative thinking and short-selling. He says, "If financial history has taught us anything, capital flows to wherever expected returns are the greatest. This drop is not unprecedented. During the US financial crisis of 2008 and 2009 there was a time when short-selling of financial stocks was prohibited. This simply distorted financial markets and ultimately had no impact. Speculation leads to both triumph and tragedy."
According to Hicks, regulators should concern themselves with fairness and transparency in the markets. "Anything else ultimately fails. Let the chips fall where they may." Hicks also adds that the Chinese stock market is highly speculative and does not reflect the economy's well-being the way most other stock markets do.
About Southridge Capital: Southridge Capital is a diversified financial holding company specializing in direct investment and advisory services to small and middle market companies. Since 1996 the structured finance team has made direct investment of over $1.8 billion into growth companies globally. Our expertise lies in our ability to customize a financing plan for the prospective client and then execute on that plan without fail. For more information, visit: www.southridge.com.
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SOURCE Southridge Capital