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China Urges Firms, Investors to Buy Stocks to Stabilise Market

China is encouraging long-term investors to buy more equities and major shareholders of listed firms to increase holdings when stocks slump, to stabilise a market rocked by the Covid outbreak.

China and the US signed an agreement on Friday to begin audits of Chinese companies listed in the US.
A Chinese national flag flutters outside the China Securities Regulatory Commission building on Financial Street in Beijing. Tougher rules imposed by the CSRC are being blamed for dozens of startups pulling out of IPOs last year. Photo: Reuters.


China is encouraging long-term investors to buy more equities and major shareholders of listed firms to increase their holdings when stocks slump, in a bid to stabilise a stock market rocked by a worsening Covid-19 outbreak.

The government will also facilitate corporate financing in Covid-hit areas and urge state shareholders of listed firms to actively buy undervalued stocks, China’s securities watchdog said in a statement on its website late on Monday.

China’s benchmark CSI300 index fell 3.1% on Monday, the biggest drop in a month, as a lockdown in Shanghai and other parts of the country threatens economic growth.

The China Securities Regulatory Commission (CSRC) said in the statement that authorities will take steps to stabilise expectations of listed companies and investors.

China will encourage social security funds, pension funds, insurers, trust firms and wealth management firms to allocate more money to equity assets, and invest more in quality listed companies, the CSRC added.

The government will also improve the financing mechanism for private companies, and support corporate fundraising, acquisitions and restructurings in areas badly hit by Covid.

To boost investor confidence, CSRC said it will encourage listed firms to buy back their shares to stabilise prices. Major shareholders and senior executives are also encouraged to actively buy shares when prices fall sharply.

Meanwhile, state shareholders should actively buy undervalued stocks, and support share buy-back and cash dividend plans by listed firms, according to the statement, which was jointly published by the CSRC, China’s state assets supervisor, and the All-China Federation of Industry and Commerce.


  • Reuters with additional editing by Jim Pollard





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Jim Pollard

Jim Pollard is an Australian journalist based in Thailand since 1999. He worked for News Ltd papers in Sydney, Perth, London and Melbourne before travelling through SE Asia in the late 90s. He was a senior editor at The Nation for 17+ years and has a family in Bangkok.


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