China’s latest effort to signal officials are serious about stabilizing slumping equities already seems to be gaining serious traction.
News that the China Securities Regulatory Commission will intervene in markets to curb sharp fluctuations in stock prices has investors buying shares in everything from Alibaba Group to Meituan to Tencent to Ping A Group to Hong Kong Exchanges and Clearing. The CSI 300 benchmark closed 3.5% higher on Tuesday (February 6), its best day since late 2022, according to Bloomberg.
Though the contours of the bourse-boosting strategy are unclear, the CSRC will direct medium and long-term funds into the stock market via a giant stabilization fund while clamping down on short-selling and dealing perceived to involve insider trading.
And surely it was no coincidence that Beijing let it leak on Tuesday that President Xi Jinping is set to get a briefing from regulators on the state of the world’s second-biggest economy’s embattled financial markets.