China’s A-share market saw a robust rebound for the second consecutive day on Wednesday, signaling positive investor response to the latest policies introduced by the country’s securities regulator aimed at stabilizing the stock market.
By the close of trading on Wednesday, major indices reflected the market’s optimism: the Shanghai Composite Index rose by 1.44 percent, the Shenzhen Component Index climbed 2.93 percent, and the ChiNext Index increased by 2.37 percent.
Institutional Investors Increase Participation
Central Huijin, a state-owned investment company, announced on Tuesday that it has expanded its investment in exchange-traded funds (ETFs), expressing strong confidence in the current market value of A shares. This move is seen as a strategic effort to bolster the market’s liquidity and investor confidence.
The China Securities Regulatory Commission (CSRC) has expressed support for Central Huijin’s actions. The CSRC stated that it will continue to coordinate and guide various institutional investors—including public funds, private funds, securities companies, social security funds, insurance institutions, and annuity funds—to participate more actively in the market.
The commission also emphasized plans to encourage listed companies to enhance share repurchases and increase holdings. Efforts will be made to introduce additional capital into the A-share market, with a commitment to safeguarding its stable operation.
Measures on Securities Lending
In a bid to curb market volatility, the CSRC has suspended new securities lending activities and strengthened oversight of existing operations. The commission noted that outstanding securities lending transactions will be settled gradually, aiming to mitigate undue market pressure.
Securities firms have been reminded of the importance of adhering to regulations and cracking down on illegal practices such as improper arbitrage in securities lending. Since the implementation of these supervisory measures, the balance of securities lending transactions has decreased by 24 percent, according to the CSRC.
Encouraging Mergers and Acquisitions
To further invigorate the market, the CSRC announced measures to promote mergers, acquisitions, and restructuring among listed companies. The commission plans to enhance inclusiveness in pricing restructuring and diversify oversight methods for performance commitments.
Notably, industry leaders with high market capitalization will benefit from a fast-tracked approval process, enabling them to acquire quality assets more efficiently. This initiative is expected to stimulate corporate growth and attract more investments into the market.
Improving Investor Returns
The CSRC has called on listed companies to proactively enhance investor returns and contribute to market stability. Companies are urged to establish long-term mechanisms for increasing investment value and to better utilize financial tools such as share buybacks, regular dividends, and strategic mergers and acquisitions.
Moreover, listed firms are required to strengthen communication with investors to effectively improve market expectations. Transparent and proactive engagement is seen as key to fostering investor trust and ensuring sustained market growth.
(With input from Xinhua)
Reference(s):
cgtn.com
