<P><FONT size=6>DB 德银：中国宏观策略－关于昨日A股调整</FONT></P>
<P><FONT size=6>6P02.27 English</FONT></P>
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<P><FONT size=4>Triggers of the correction<BR>We think yesterday’s 9% drop in Shanghai A share index—the largest single-day decline in ten years--and a 3% fall in the H share index were partially explained by the following concerns among market participants:<BR>1) Feb CPI inflation is likely to be as high as 3% yoy and the PBOC is likely to raise rates in response to the Feb CPI figure;<BR>2) The govt couldl form a special task force within CSRC to investigate into illegal securities operations;<BR>3) The govt may adopt further measures to crackdown on illegal fund flows (bank lending and foreign funds) to the stock markets;<BR>4) A capital gains tax is likely to be levied on stock transactions soon;<BR>5) CSRC chairman Shang Fuling may not be in his position much longer</FONT></P>