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MNI: China Should Limit IPOs, Boost Growth To Lift Stock Market

MNI (Singapore)
MNI (Beijing)

Chinese authorities should look at other alternatives over a stabilisation fund to support the stock market, advisors and analysts told MNI.

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Authorities should provide more pro-growth policies, limit IPOs to rebalance supply and demand, and encourage more long-term funds to revive confidence in China’s stock market, policy advisors and market analysts told MNI.

China’s top securities regulator said Sunday it would suspend restricted shares lending and crack down on illegal use of securities lending to reduce holdings and cash out. This followed a string of supportive measures last week including a 50bp cut to bank reserves, which helped lift A shares off three-year lows. However, the Shanghai Composite Index tumbled 1.48% to finish Wednesday at 2,788.55, reflecting deep investor pessimism.

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Authorities should provide more pro-growth policies, limit IPOs to rebalance supply and demand, and encourage more long-term funds to revive confidence in China’s stock market, policy advisors and market analysts told MNI.

China’s top securities regulator said Sunday it would suspend restricted shares lending and crack down on illegal use of securities lending to reduce holdings and cash out. This followed a string of supportive measures last week including a 50bp cut to bank reserves, which helped lift A shares off three-year lows. However, the Shanghai Composite Index tumbled 1.48% to finish Wednesday at 2,788.55, reflecting deep investor pessimism.

Keep reading...Show less