Nation lowers costs for stock trading in fresh support for confidence

China Securities Depository and Clearing Corporation Limited ( CSDC) on Thursday announced the axing of transfer fees for A shares, the first such cuts in nearly seven years, in a fresh move to lift investor confidence amid recent weak performances.

Effective Friday, the transfer fee for stock trades on the Shanghai and Shenzhen exchanges will be halved from 0.002 percent to 0.001 percent per side of the consideration of the transaction amount.

The transfer fee for Chinese mainland shares traded in the Beijing market will be cut from 0.0025 percent to 0.001 percent.

The announcement is intended to foster the stable and healthy operation of capital markets, reinvigorate the market through lowering costs for investors, and ramp up the support for the real economy, CSDC said in a brief notice on its website.

The previous downward revision was in August 2015, when the mainland equity market was grappling with the fallout from a massive rout over the preceding two months.

The reduced transfer fees are an indication that the authorities are taking heed of the capital market, said Yang Delong, chief economist at Shenzhen- based First Seafront Fund Management Co.

Yang cited a number of favorable policy announcements spanning consumption, infrastructure construction, reduced reserve requirements and most recently the transfer fee cut.

“All these would help restore market confidence and foster a market rebound,” he remarked.

The Thursday announcement instantly went viral throughout Chinese social media, becoming one of the top search topics on Twitter- like Sina Weibo, with many web users hailing it as one of the most substantial good news for mainland shares recently.