Market surges 2% on move to woo foreigners
SHANGHAI shares jumped nearly 2 percent as market sentiment was lifted by new rules to support equity incentives for foreign employees at domestic listed firms.
The Shanghai Composite Index closed up 1.84 percent at 2,721.07 points.
Almost all sectors posted gains. Shares of more than 80 companies listed on the A-share market soared by the daily limit of 10 percent. Shares of brokerages, electronics manufacturers and telecommunications firms were among the biggest gainers.
Sentiment rose after the People’s Bank of China and the State Administration of Foreign Exchange released detailed regulatory requirements on Tuesday to support equity incentives for foreign employees at domestic listed firms, in a bid to further open up the capital market.
Procedures will be streamlined as the money involved will be managed in a registration-based manner, according to a statement published on the official websites of the People’s Bank of China and the State Administration of Foreign Exchange.
Related operations such as cross-border payment and remittance can be conducted after registration without having to apply for approval.
The new rules also allow foreign workers to choose the source of the money involved in equity incentives. It can be from their legal domestic income or be remitted from overseas, Xinhua news agency reported.
Investors were also buoyed after Xiao Yuanqi, spokesperson for the China Banking and Insurance Regulatory Commission, said that it encourages insurance companies to buy shares of listed companies.
Xiao said that insurance funds play an important role in stabilizing China’s capital market. The commission encourages insurance companies to buy more shares and bonds in high-quality listed companies to make value investments and long-term investments.
Zhu Junsheng, deputy director of the Insurance Research Department of the Development Research Center of the State Council, said that the move will boost market confidence as well as promote healthy development of the capital market.
Eastern Communications Co surged 9.98 percent to 16.64 yuan (US$2.46), Sinolink Securities Co jumped 7.19 percent to 8.65 yuan and New China Life Insurance Co added 3.43 percent to 44.01 yuan.