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China restricts lending of securities for short promoting

PUBLISHED : 28 Jan 2024 at 17:18

China restricts lending of securities for short promoting

Wiki commons

HONG KONG – China will live the lending of distinct shares for short promoting from Monday the securities regulator launched Sunday, in a transfer to augment the country’s slumping stock markets.

Strategic traders would no longer be allowed to lend out shares for the period of agreed lock-up sessions, the Shanghai Stock Alternate and Shenzhen Stock Alternate talked about in separate releases following the China Securities Regulatory Rate’s statement.

Authorities are taking measures following an alarming race in Chinese shares — the MSCI China Index has lost 60% from a February 2021 peak. Final October, limits gain been build apart on the lending of shares that executives and hundreds of key employees in finding in strategic placements, and hundreds of curbs gain been imposed.

Since then, the excellent worth of shares lent by strategic traders has dropped 40%, the CSRC talked about Sunday. The MSCI China gauge scored its first weekly create of the year closing week, trimming its loss for 2024 to about 7%, after the central bank launched an forthcoming reserve requirement ratio decrease and plans for focused stimulus.

The CSRC additionally vowedto crack down on the bypassing of lock-up restrictions. From March 18, securities finance companies that borrow shares from institutional traders will deserve to again sometime earlier than offering them to brokerages somewhat than the stock being straight on hand, in retaining with Sunday’s statement. 

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