After a dismal start to the year, China’s top securities regulator says it would work on creating a mechanism to stabilize the market and promises to anchor market expectations in 2025. Following a work meeting on its priorities for the year, the China Securities Regulatory Commission (CSRC) issued a statement stating that stability is at the top of its agenda for 2025 and that it will do everything in its power to create and sustain the market’s stabilizing and positive momentum.
What China Securities Regulatory Commission (CSRC) will do?
The CSRC announced that it will strengthen the development of a market-stabilization mechanism and collaborate with the People’s Bank of China (PBOC) to improve the efficacy of two structural monetary policy tools. The regulator promised to strengthen its policy advice and to react quickly to market concerns, but it did not elaborate on how such a mechanism would operate.
A liquidity assistance facility that enables institutional investors to access the PBOC for funding for stock acquisitions is one of the two structural monetary policy tools mentioned by the CSRC. The second is a swap facility that allows funds, insurance companies, and securities firms to get liquidity from the central bank to buy stocks.
Hong Kong stocks rise from 4-month low
China’s securities regulator promised to stabilize the market following a shaky start to the year, and Hong Kong stocks rose from a four-month low. At the close, the Hang Seng Index increased 1.8% to 19,219.78, ending a 4.5-percent loss that had driven the benchmark to its lowest level since September 23. The Hang Seng Tech Index experienced a 3.1% increase. In China, the Shanghai Composite Index increased 2.5%, while the CSI 300 Index increased 2.6%.
The biotech company Wuxi AppTec had a more than 4% increase in value following the sale of a unit. Tencent Holdings and Alibaba Group Holdings, the largest firms on the Hang Seng index, also saw gains.
