Main­land China to sta­bi­lize mar­ket for a ‘num­ber of years’: reg­u­la­tors

The China Post - - INTERNATIONAL -

Main­land China’s mar­ket reg­u­la­tor on Fri­day vowed to sta­bi­lize the volatile stock mar­ket for a “num­ber of years,” say­ing a state­backed com­pany tasked with buy­ing shares will have an en­dur­ing role.

“For a num­ber of years to come, the China Se­cu­ri­ties Fi­nance Corp. will not exit (the mar­ket). Its func­tion to sta­bi­lize the mar­ket will not change,” the China Se­cu­ri­ties Reg­u­la­tory Com­mis­sion ( CSRC) said in a state­ment on its of­fi­cial mi­croblog.

The China Se­cu­ri­ties Fi­nance Corp. (CSF) has played a cru­cial role in Bei­jing’s stock mar­ket res­cue, which was launched af­ter Shang­hai’s bench­mark crashed 30 per­cent in three weeks from midJune.

The reg­u­la­tor’s com­ments were the first time it has given any in­di­ca­tion of how long it would in­ter­vene to sup­port eq­ui­ties.

Author­i­ties gave the CSF huge fund­ing to buy shares and sub­se­quent spec­u­la­tion the gov­ern­ment was pre­par­ing to with­draw from the stock mar­ket has spooked in­vestors.

The state­ment added the CSF will only en­ter the mar­ket dur­ing times of volatil­ity.

“When the mar­ket dras­ti­cally fluc­tu­ates and may trig­ger sys- temic risk, it will con­tinue to play a role to sta­bi­lize the mar­ket in many ways,” said the state­ment, which quoted CSRC spokesman Deng Ge.

Other gov­ern­ment moves to prop up shares have in­cluded bar­ring “big” in­vestors from selling their stakes and crack­ing down on short-selling — a bet prices will go lower.

Shang­hai stocks closed up 0.27 per­cent on Fri­day, cap­ping their big­gest weekly gain in two months as in­vestors bet a sur­prise de­val­u­a­tion of the main­land Chi­nese cur­rency this week au­gured more mea­sures from Bei­jing to boost sag­ging eco­nomic growth.

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