China’s markets regulator has consulted securities firms for possible measures to boost stocks amid growing signs Beijing is seeking to restore investor confidence, people familiar with the matter said.
(Bloomberg) — China’s markets regulator has consulted securities firms for possible measures to boost stocks amid growing signs Beijing is seeking to restore investor confidence, people familiar with the matter said.
The China Securities Regulatory Commission convened a meeting this week with select brokerages to solicit their feedback, the people said, asking not to be named discussing a private matter. Among measures proposed by brokerages were a possible cut in the stamp duty on stocks trading and a slowdown in initial public offerings to help liquidity, the people said.
The CSRC didn’t give any indication of how it plans to boost the market, the people said. The regulator didn’t immediately respond to a fax requesting comment.
The move suggests authorities are eager to follow through on an earlier pledge by the Politburo to enliven the nation’s $10 trillion stock market and boost investor sentiment. Beefing up stocks, which remain one of the major channels for household savings, would also help Beijing improve funding for the corporate sector.
The consultation followed a rare meet-up between the CSRC and global funds last week where officials including Vice Chairman Fang Xinghai tried to soothe concerns among foreign investors about investing in China.
Chinese stocks have been weighed down by the nation’s slowing economy for much of this year, underperforming their emerging market peers at one point by the widest margin since at least 1999.
The CSI financials subgauge soared 4.6% on Friday, extending gains earlier this week amid market chatter of a stamp duty cut. Hithink Royalflush Information Network Co. surged 17% and China Galaxy Securities Co. jumped by the 10% daily limit.
The gains helped lift the CSI 300 Index by 2.3%. The benchmark gauge recorded the best weekly performance since November. Overseas investors net purchased 16 billion yuan ($2.3 billion) of mainland shares on Friday, taking the week’s inflows to the largest since January.
“The speculation about cutting stamp duty has helped lift market sentiment today, as the move would be following the vows to boost financial markets mentioned during the Politburo” meeting, said Steven Leung, executive director at UOB-Kay Hian Hong Kong.
(Adds comment in last paragraph. An earlier version corrected date range of inflows in next to last paragraph.)
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