China is encouraging long-term investors and large shareholders of listed companies to increase their holdings as share prices fall in a bid to stabilize a market shaken by the worsening local Covid-19 outbreak.
The government will also facilitate corporate financing in areas hit by Covid-19 and ask state shareholders of listed companies to actively buy undervalued stocks, the country’s securities regulator said in a statement on its website on Monday. .
The Chinese benchmark CSI300 index fell 3.1% on Monday, the biggest drop in a month, as lockdowns in Shanghai and other parts of the country threaten economic growth. On Tuesday, however, the index recovered by 1.95%.
Yuan Yuwei, hedge fund manager at Water Wisdom Asset Management, said mobilizing capital, especially public money, for Chinese equities now makes no sense.
“There remain a lot of bubbles and structural risks in this market, which also faces huge external uncertainty,” he said, citing the risk of capital outflows, the fallout from the Ukraine crisis and rising geopolitical tensions.
The China Securities Regulatory Commission said in a statement on Monday that the authorities will take steps to stabilize the expectations of listed companies and investors.
Source: CNN Brasil
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