There is a really strange phenomenon in Chinese stock markets. When the regulation institution decides to get some new companies listed (it is noteworthy that IPO has to get permission from Securities Regulatory Commission in China), the stock market drastic falls, and the Chinese investors sell out their stocks crazily. 

 

Some argue that more stocks listed means that more money is needed by the market, but the supply is constant in the short term. 

 

So the stock price falls. Base on the scenario? What do you think is the possible reason?

Answer rating: 100% (QA)

One possible reason for the phenomenon described is the concept of supply and demand in the stock ma... View the full answer