2023-08-18 15:48:00
The Chinese authorities have come up with a series of measures to support the revitalization of the financial market. This is seen as an indication of growing displeasure with the declining pace of stock prices and the yuan.
Mainland China exchanges this week urged some investment funds to avoid overselling stocks. Authorities have instructed state-owned banks to step up foreign exchange interventions to support the yuan. It strongly encouraged stock buybacks for listed companies on the science and technology board, which consists mainly of high-tech companies. Securities regulators announced late Wednesday that they would cut commissions on stock trading. It said it would consider extending trading hours for stocks and bonds.
So far, though, it hasn’t been enough to dispel investor anxiety. The Hang Seng China Enterprises Index (H shares) fell for the third consecutive week. Hong Kong’s Hang Seng Index is down more than 8% this year, making it one of the weakest of the world’s major stock indexes. It entered a bear market on the 18th. The yuan edged higher once morest the dollar on Thursday, but is down more than 5% this year.
Mainland China’s financial markets risk a vicious cycle of capital outflows as concerns grow over a series of issues including disappointing economic data, deflation fears, a deteriorating housing market and a crisis in the shadow banking industry. confronting.
On the other hand, some investors are optimistic regarding the longer term. Joshua Crabbe, head of Asia-Pacific equities at Robeco Hong Kong, told Bloomberg Television that now is the time to explore opportunities in Chinese equities given declining valuations.
He expects additional measures to support private consumption will be announced. Other measures the authorities may come up with include lowering the stamp duty required to buy and sell stocks, removing foreign investment caps, and relaxing stock trading rules.
China Considers Lower Stamp Duty on Stock Transactions, Aims for Market Recovery-Partners (1)
Bloomberg Intelligence (BI) strategist Marvin Cheng said of the announcement that the company will consider lowering commissions and extending trading hours for stock trading. “It doesn’t address the heart of the problem, which is the lack of economic growth and the economic slowdown.”
Original title:China Steps Up Efforts to Stabilize Markets as Confidence Slumps
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