China intensifies measures to maintain stock market stability.

On Wednesday, China's A-share market recorded an impressive climb for the second consecutive day. This rise was seen as a positive reaction to a succession of new policies aimed at stock market stabilization, as rolled out by the Chinese securities regulator.

The Greater China market indices witnessed considerable growth on Wednesday's close of trading. The Shanghai Composite Index increased by 1.44 percent, while the Shenzhen Component Index and ChiNext Index witnessed a surge of 2.93 percent and 2.37 percent respectively.

Influx of Institutional Investors

State-owned investment firm, Central Huijin, revealed in a Tuesday announcement that it had expanded its exchange-traded fund investment ambit. The move reflects the organization's strong confidence in the present A-share market allocation value.

The China Securities Regulatory Commission (CSRC) endorsed this venture and committed to guiding an assortment of institutional investors – encompassing public and private funds, securities firms, social security funds, insurance institutions, and annuity funds – towards a more rigorous market involvement.

The CSRC also intends to motivate listed corporations to ramp up the scale of buybacks and holdings, channel incremental funds towards the A-share market, and do everything possible to preserve the stability of market operations.

Freezing of New Securities Lending

Alongside other measures, the CSRC announced a suspension of new securities lending and heightened business oversight. The commission indicated that existing securities lending transactions will be methodically settled over time.

Securities companies were reminded of the crucial need to clamp down on unlawful modus operandi such as unjustifiable arbitrage exploiting security lending. The commission further noted a drop of 24 percent in securities lending transaction balance following the recent supervisory initiatives.

Declaration of M&A Initiatives

Additional measures disseminated by the CSRC involved facilitating merger, acquisition, and restructuring exercises amongst listed entities.

In this regard, the CSRC aims to elevate the leniency in restructuring pricing and expand the supervisory techniques for managing performance promises. Plans are also in place to expedite the approval process for industry leading entities having substantial market vale, in order to enable them to acquire high-quality assets more efficiently.

CSRC Mandate: Bolstering Investor Yield

The securities regulator has advocated for listed corporations to take initiative in augmenting investor profits and sustaining market equilibrium.

Furthermore, the CSRC has recommended the establishment of long-term strategies for augmenting investor value. This may involve better exploitation of instruments like share buybacks, regular dividends, as well as mergers and acquisitions.

Moreover, listed corporations are urged to fortify their communication channels with investors, thereby facilitating improved market outlooks.

(Source: Xinhua)

Max Fischer for TROIB News