China for the first time since 2008 reduced the duty on stock trading – Kommersant
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Today, August 27, the China Securities Regulatory Authority (CSMA) lowered state duty on trading in shares – from 0.1% to 0.05%. This is the first such decline since 2008. The duty reduction is part of a wide range of measures that should stimulate the previously declining interest of investors in the local stock market. These measures, as conceived by the regulator, should “improve capital markets and increase investor confidence.”
In particular, the URSM announced its intention to slow down the pace of the IPO, though without saying what it is going to do to this end. The regulator explained this decision with “current market conditions”. In addition, it is planned to introduce restrictions on the level to which the main shareholder of the company can reduce its share. The FMSD is also going to set limits on the frequency and amount of debt refinancing by companies that constantly report losses or whose share price has fallen below the IPO level. True, an exception will be made for developers.
According to experts, by announcing such measures, the Chinese authorities want to dispel the fears of investors caused by problems in the real estate market, a decrease in consumer spending, insufficiently fast recovery of the Chinese economy, etc. The stock index of the 300 largest Chinese companies CSI 300 has decreased by 4.6% since the beginning of the year. Previously reportedthat, according to Bloomberg, the outflow of foreign capital from the shares of companies represented in the CSI 300 lasted 12 days in a row – this is a record since the start of statistics.
“Such policies are likely to give the market a short-term boost, but are unlikely to make much of a difference in the long term. The recovery could last only two or three days or even less,” Xie Chen, an investment manager at Shanghai Jianwen Investment Management, commented on the decision of the regulator.
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