China’s central bank and securities regulator are expected to meet with financial institutions on Monday to discuss measures to bolster the country’s stock market, following a sell-off in October that heightened concerns over market stability, according to mainland media reports.
Some securities firms and fund managers received notices of a meeting with the PBOC and CSRC scheduled for Monday to discuss the use of policy tools aimed at supporting the capital market, according to the report.
“Through market-oriented incentive mechanisms, these tools can help correct market overshooting and stabilise investor expectations,” said Liao Bo, chief macroeconomic analyst at Northeast Securities. “Such countercyclical measures are particularly useful when the stock market is oversold and share prices are undervalued.”
The reported meeting comes after mainland China’s equity market suffered a turbulent October, as a global sell-off in artificial intelligence-related stocks weighed on sentiment amid persistent concerns over China’s economic growth and the outlook for further fiscal stimulus.
The benchmark CSI 300 Index fell 8.5 per cent in October, its biggest monthly decline in more than a decade, while the Shanghai Composite Index dropped 6.3 per cent.
The reports came weeks after a CSRC symposium on October 10, where chairman Wu Qing met executives of listed Chinese companies and experts from securities and fund institutions to discuss the capital market and financial conditions.
The facility allows eligible banks to obtain relatively low-cost funding from the central bank to finance such transactions, helping listed Chinese companies support their share prices and bolster investor confidence.
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