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Sunday, 9 November 2008
Think-tank proposes fund to support market
The mainland’s top think-tank has proposed creating a fund of 600 billion to 800 billion yuan (HK$680 billion to HK$910 billion) to buy shares of 50 state-owned companies if stocks dip below a key threshold, a newspaper reported yesterday.
The mainland’s top think-tank has proposed creating a fund of 600 billion to 800 billion yuan (HK$680 billion to HK$910 billion) to buy shares of 50 state-owned companies if stocks dip below a key threshold, a newspaper reported yesterday.
The proposal, which was made in a report by the Chinese Academy of Social Sciences’ international finance research centre, had been submitted to “high-level” government officials, The Economic Observer said. The report suggested the fund would purchase shares if the benchmark Shanghai Composite Index dropped below 1,500 points, “to show the determination and confidence of the government in stabilising the stock market”.
The mainland’s main stock index has fallen more than 70 per cent since its peak in October last year, but last week it rose for the first time in five weeks, finishing at 1,747.713 on Friday, amid speculation about possible government measures to boost the market.
The newspaper said the report proposed that the stock-stabilisation fund be capitalised out of the foreign-exchange reserve fund or from the issuance of special government bonds. It suggested letting sovereign wealth fund China Investment Corp (CIC), the China Securities Regulatory Commission and the Social Security Fund jointly operate and manage the funds, according to the paper.
The idea of a stock-stabilisation fund has been around for some time as the stock market has continued its slide.
In September, the government announced that Central Huijin, an arm of CIC, would buy shares in the mainland’s top three banks as part of a set of steps to rescue the market.
It marked the first time in the nearly 18-year history of the mainland’s modern stock market that authorities had said a central government agency would buy shares to support the market.
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Think-tank proposes fund to support market
Reuters in Beijing
9 November 2008
The mainland’s top think-tank has proposed creating a fund of 600 billion to 800 billion yuan (HK$680 billion to HK$910 billion) to buy shares of 50 state-owned companies if stocks dip below a key threshold, a newspaper reported yesterday.
The proposal, which was made in a report by the Chinese Academy of Social Sciences’ international finance research centre, had been submitted to “high-level” government officials, The Economic Observer said. The report suggested the fund would purchase shares if the benchmark Shanghai Composite Index dropped below 1,500 points, “to show the determination and confidence of the government in stabilising the stock market”.
The mainland’s main stock index has fallen more than 70 per cent since its peak in October last year, but last week it rose for the first time in five weeks, finishing at 1,747.713 on Friday, amid speculation about possible government measures to boost the market.
The newspaper said the report proposed that the stock-stabilisation fund be capitalised out of the foreign-exchange reserve fund or from the issuance of special government bonds. It suggested letting sovereign wealth fund China Investment Corp (CIC), the China Securities Regulatory Commission and the Social Security Fund jointly operate and manage the funds, according to the paper.
The idea of a stock-stabilisation fund has been around for some time as the stock market has continued its slide.
In September, the government announced that Central Huijin, an arm of CIC, would buy shares in the mainland’s top three banks as part of a set of steps to rescue the market.
It marked the first time in the nearly 18-year history of the mainland’s modern stock market that authorities had said a central government agency would buy shares to support the market.
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