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(Adds comment on buying ICBC stock in eighth paragraph.)
(Bloomberg) — Billionaire Guo Guangchang said deficiencies in designing China’s financial infrastructure were partly behind the slump that wiped out almost $4 trillion from the nation’s stock markets.
The equity market is young and going through an “adolescent period,” the founder and chairman of Fosun Group, China’s largest closely held conglomerate, said in a speech at a Shanghai forum on Sunday. Without elaborating on the deficiencies, he said even mature markets have made mistakes.
Guo, 48, defended government intervention to stop the stock rout, saying the slump had become “irrational.” The government cut interest rates, while initial public offerings were suspended among steps to stem the Shanghai Composite Index’s 32 percent tumble from its June 12 peak through July 8.
The gauge rallied 11 percent in the next two days. Other support measures included halting trading in more than 1,300 companies’ shares, a ban on stockholders and executives from selling stakes in listed companies for six months, an order for companies to buy equities and an investigation by the nation’s public security bureau into short-selling.
China’s stock market shows “how crucial value investing is,” Guo was quoted as saying on the company’s official WeChat public account on July 8. “Amid a sheer panic in the market, we should be brave and act in the opposite of the crowd.”
Guo has previously indicated he likes to mimic Warren Buffett’s approach at Berkshire Hathaway Inc. as a value investor, taking large…