Regulator to halt stock market intervention
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.