By In an effort to boost investor confidence in the second-largest economy in the world. China has taken a number of steps, including lowering stock trading taxes for the first time since 2008.
Over the previous few weeks, foreign investors sold off Chinese stocks worth billions of dollars as the outlook for the economy grew gloomier.
The news on Monday increased Chinese stock prices. However, by the afternoon, much of the gains had vanished as investors started to worry again about China’s real estate crisis and its slow development prospects.
China
According to a joint statement release on Sunday by the State Administration of Taxation and the Ministry of Finance, the 0.1% stamp fee on stock trades would be reduce by half as of Monday. The regulators state that the action intend to “revive the capital market and boost investor confidence.”
This is the first such decrease since Beijing cut the stock trading tax from 0.3% to 0.1% on April 24, 2008, in an effort to stabilize the market during the upheaval brought on by the global financial crisis. The Shanghai Composite Index quickly increased by 9.3% as a result of that action, making it the second largest daily gain in history at the time.
Separately on Sunday, the top securities watchdog in the nation, the China Securities Regulatory Commission (CSRC), also outlined a number of initiatives to “boost investor confidence” in the faltering stock market.
According to several statements made by the CSRC, the measures included lowering the amount of collateral stock traders were required to hold with their brokers, slowing the pace of initial public offerings, and placing limitations on how much and how frequently major shareholders of listed companies could sell their shares on the stock market.
As investors worried about a growing recession in the world’s second-largest economy and its real estate problem, Chinese stock markets have fallen precipitously in recent weeks. Data from Hong Kong’s Stock Connect trading scheme shows that from August 7, overseas investors have sold a net amount of 78 billion yuan ($11 billion) worth of Chinese stocks in a three-week period.
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