The China Securities Regulatory Commission (CSRC), the country’s chief markets regulator, is actively considering various strategies aimed at stimulating the national stock market. This move comes amidst clear indications that the Beijing government is intent on rebuilding investor trust, according to knowledgeable insiders.
Date: July 28, 2023
Place: New Delhi, India
Sources revealed to Bloomberg that the CSRC recently organized a consultation session with selected securities firms to gather their input. The sources, who wished to remain anonymous as they were discussing confidential matters, stated that suggested remedies from these brokerages included potentially reducing stamp duty on stock trading and slowing down the pace of initial public offerings (IPOs) to aid market liquidity.
The CSRC, at this meeting, emphasized that ongoing reforms and expansions in the capital market need to be further consolidated. In particular, they highlighted the importance of steadfast progress in investment-related reforms.
Earlier in July, Shanghai Securities News reported on the CSRC’s ongoing work on an action plan to bring about changes at the investment side of the capital market. The objective is to strike a balance between investment and financing and to channel more medium- and long-term capital toward equity investment.
The regulatory efforts have already shown signs of increasing Chinese companies’ interest in overseas IPOs. During the first half of this year, 19 Chinese firms made their debut on the US stock market, collectively raising $600 million. Though CSRC’s spokesperson, Li, did not provide specific numbers, he mentioned that both overseas IPOs and fundraising activities have seen a notable surge compared to the corresponding period last year.
During the meeting, the CSRC committed to upholding its supervisory duties and pledged to improve the execution of its three-year action plan that aims to foster the high-quality development of listed companies. This plan was launched in late 2022. The CSRC also stated that it intends to finalize the normalized dividend issuance mechanism for listed companies.
Despite these efforts, the Shanghai Composite Index and the Shenzhen Component Index observed a minor dip of 0.26% and 0.47% respectively on Wednesday.
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Sources- Bloomberg, Money Control, Mint
