China’s stabilisation pledge did not lift stocks. Why are investors praising it?
A slew of market-stabilising measures unveiled by the head of China’s securities regulator this week has won praise from investors, despite the fact that mainland stock prices did not roar back over the following days. The focus on supporting stocks and investor confidence over the long term, rather than deploying contingency actions to deal with short-term market turmoil, signalled a much-needed…
China's securities regulator, led by Wu Qing, has unveiled a series of market-stabilising measures aimed at attracting fresh funds and encouraging stock buy-backs, signaling a shift in Beijing's strategy from short-term market intervention to long-term investor confidence building. While the measures did not immediately boost stocks, with the benchmark CSI 300 Index falling over a 1% this week, industry players praised the shift in regulatory approach, emphasizing the focus on building a regular system rather than relying on short-term contingency measures.
The regulator approved 18 actively managed ETFs, potentially channeling 2 billion yuan of fresh capital into the market, and plans to gradually increase foreign ownership in China's onshore stock market through the expansion of cross-border Stock Connect programme.
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