Reg­u­la­tor to halt stock mar­ket in­ter­ven­tion

China Daily (Canada) - - NEWS IN REVIEW -

China Se­cu­ri­ties Fi­nance Corp, the State-owned mar­gin len­der which played a cru­cial role in halt­ing the re­cent slide in Chi­nese stock mar­kets, is to end its di­rect in­ter­ven­tion in the mar­ket and al­low mar­ket forces to play a big­ger role in de­ter­min­ing share prices.

The an­nounce­ment, from the China Se­cu­ri­ties Reg­u­la­tory Com­mis­sion, also said how­ever, that it would con­tinue to take what­ever steps were nec­es­sary to main­tain sta­bil­ity and avoid sys­temic risk, af­ter the re­cent sell-off which wiped out $4 tril­lion in mar­ket value be­tween June and July.

Ear­lier media re­ports sug­gested that com­mer­cial banks had pro­vided liq­uid­ity ex­ceed­ing 1 tril­lion yuan ($156 mil­lion) to CSFC to prop up the mar­ket.

New bank lend­ing has also surged to 1.48 tril­lion yuan, a 14.4 per­cent rise from the same pe­riod last year.

Econ­o­mists in­ter­preted the sur­pris­ing loan growth in July as a re­sult of the gov­ern­ment’s un­prece­dented ef­forts to sup­port the stock mar­ket.

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