Shanghai Stock Exchange. Photo: iStock

Both the Shanghai Stock Exchange and Shenzhen Stock Exchange have taken action to stabilize the tumbling A-share market by issuing statements confronting the current equity pledge risks, The Paper reported.

The SSE proposed five measures: actively promoting the quality of listed companies; increasing the support of mergers and acquisitions of listed companies; actively resolving market risks; actively promoting exchange bond market innovation; and actively guiding domestic and foreign long-term funds to invest in A shares.

In terms of resolving market risk, the exchange emphasized that it will continuously monitor the dynamic changes in stock-pledged lending, improve the rules of listed companies’ equity transfers and repo transactions, as well as research and launch financial instruments such as innovative funds to help listed companies with promising prospects to ease their current plight.

The Shenzhen Stock Exchange, or SZSE, also vowed to work closely with local governments and financial institutions, to support listed companies with development prospects but temporarily in operating difficulties to ease their liquidity issues.