New York (HedgeCo.net) – After the drubbing the Chinese market took on Monday, regulators enacted measures to halt the slide. These measures included allowing 1,400 companies to halt trading and providing the China Securities Finance Corp., a state-run financing vehicle with more than $480 billion to intervene in markets.

The attempts to stabilize the market seem to have helped on Tuesday as the Shanghai Composite only lost 1.68% which was a welcome relief after the 8.5% drop on Monday. Market observers had to be concerned about another big decline on Tuesday after one of China’s biggest internet companies, Baidu (Nasdaq: BIDU) issued their earnings report after the U.S. market closed on Monday. In after-hours trading, BIDU dropped 5% and in pre-market trading on Tuesday the stock was down over 12.5%.

Many investors have expressed concern over Chinese regulators meddling in the markets and think that in the long run the measures will hurt the market more than the initial decline would have. Three of the most well-known hedge fund managers—Paul Singer, Bill Ackman and Richard Perry—all criticized the intervention during a recent industry conference in New York. “All of a sudden you can’t trade and don’t even know a rough price … and your brokerage firm has become insolvent,” Singer said.

Rick Pendergraft
Research Analyst
HedgeCoVest