China's A-share market saw consistent gains over two days, with the Shanghai Composite Index rising 1.44%, the Shenzhen Component Index climbing 2.93%, and the ChiNext Index increasing by 2.37%. This positive trend follows recent announcements by the country's securities regulator aimed at stabilizing the stock market.
Institutional Investors Enter Market
Central Huijin, a state-owned investment company, expanded its investment scope of exchange-traded funds and acknowledged the current market allocation value of A shares. The China Securities Regulatory Commission (CSRC) supports this move and will continue to guide various institutional investors—including public funds, private funds, securities companies, social security funds, insurance institutions, and annuity funds—to engage more actively in the market.
The CSRC also plans to encourage listed companies to increase repurchases and holdings, introduce additional incremental funds into the A-share market, and ensure the stable operation of the market.
New Securities Lending Suspended
The CSRC has suspended new securities lending and enhanced supervision of the business. Outstanding securities lending transactions will be phased out, and securities firms are urged to eliminate illegal practices such as improper arbitrage using securities lending. Since the implementation of these measures, securities lending transactions have decreased by 24%.
Regulator Announces M&A Measures
Additional measures from the CSRC include promoting mergers, acquisitions, and restructuring among listed companies. The CSRC aims to improve pricing restructuring inclusiveness and diversify oversight methods for performance commitments. Industry leaders with high market values will benefit from a fast-tracked approval process, facilitating efficient acquisition of quality assets.
CSRC: Improve Investor Returns
The CSRC has called on listed companies to proactively enhance investor returns and maintain market stability. Efforts should focus on establishing a long-term mechanism for increasing investment value and effectively utilizing tools such as share buybacks, regular dividends, mergers, and acquisitions. Listed firms are also required to strengthen communication with investors to improve market expectations.
Reference(s):
cgtn.com
