China to stabilise stock market for 'number of years'

GMT 10:45 2015 Friday ,14 August

Arab Today, arab today China to stabilise stock market for 'number of years'

Shanghai market
Shanghai - AFP

China's market regulator on Friday vowed to stabilise the volatile stock market for a "number of years", saying a state-backed company tasked with buying shares will have an enduring role.

"For a number of years to come, the China Securities Finance Corp. will not exit (the market). Its function to stabilise the market will not change," the China Securities Regulatory Commission (CSRC) said in a statement on its official microblog.

The China Securities Finance Corp. (CSF) has played a crucial role in Beijing's stock market rescue, which was launched after Shanghai's benchmark crashed 30 percent in three weeks from mid-June.

The regulator's comments were the first time it has given any indication of how long it would intervene to support equities.

Authorities gave the CSF huge funding to buy shares and subsequent speculation the government was preparing to withdraw from the stock market has spooked investors.

The statement added the CSF will only enter the market during times of volatility.

"When the market drastically fluctuates and may trigger systemic risk, it will continue to play a role to stabilise the market in many ways," said the statement, which quoted CSRC spokesman Deng Ge.

Other government moves to prop up shares have included barring "big" investors from selling their stakes and cracking down on short-selling -- a bet prices will go lower.

Shanghai stocks closed up 0.27 percent on Friday, capping their biggest weekly gain in two months as investors bet a surprise devaluation of the Chinese currency this week augured more measures from Beijing to boost sagging economic growth.

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