The "Four Arrows" Policy and "Combination Fist" in Active Capital Markets Help Boost Market Confidence
CCTV News: Yesterday, the Ministry of Finance, the State Administration of Taxation, and the China Securities Regulatory Commission issued multiple policies to activate the capital market, including the implementation of a 50% reduction in stamp duty on securities trading, a phased tightening of IPO pace, standardization of share reduction behavior, and a reduction in financing margin ratio. Analysts point out that the unprecedented intensity of the "four arrows" in the active capital market, releasing positive policy signals, will have a significant effect on boosting confidence in the capital market.
According to the notice from the Ministry of Finance and the State Administration of Taxation, from August 28, 2023, the stamp duty on securities trading will be reduced by half.
Chen Li, Chief Economist of Chuancai Securities: This event fully reflects the central government's firm attitude towards the active capital market and its confidence and determination to protect the stock market, releasing significant positive policy signals.
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Data shows that there are over 220 million individual investors in the Chinese stock market, accounting for 99.76% of all market investors. Among them, small and micro investors with a market value of less than 100000 yuan and between 100000 and 500000 yuan account for 87.87% and 8.12%, respectively. Experts say that the halving of securities trading stamp duty this time benefits a large number of small and medium-sized investors.
The China Securities Regulatory Commission also announced yesterday that, based on recent market conditions, it will gradually tighten the pace of initial public offerings of enterprises and promote dynamic balance between investment and financing; Strictly require listed companies to invest their raised funds in their main business and strictly limit diversified investments.
The China Securities Regulatory Commission (CSRC) stated that if a listed company has a situation of breaking through its stock market or net assets, or has not received cash dividends in the past three years, and the cumulative amount of cash dividends is less than 30% of the average annual net profit in the past three years, the controlling shareholder or actual controller shall not reduce their holdings of the company's shares through the secondary market.
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Yang Delong, Chief Economist of Qianhai Open Source Fund: The China Securities Regulatory Commission regulates the behavior of major shareholders in reducing their holdings, cracking down on "detours" in reducing their holdings. The China Securities Regulatory Commission encourages shareholders of related listed companies to promise not to stick to their shares or extend their lock up period. These can effectively alleviate the current market funding pressure, protect the interests of small and medium-sized investors, and are expected to promote market recovery.
In addition, with the approval of the China Securities Regulatory Commission, the Shanghai Stock Exchange, Shenzhen Stock Exchange, and Beijing Stock Exchange have issued notices to revise the Implementation Rules for Margin Trading, reducing the minimum margin ratio for investors to purchase securities through margin trading from 100% to 80%. This adjustment will be implemented after the market closes on September 8, 2023.
Yang Delong, Chief Economist of Qianhai Open Source Fund: On the basis of overall controllable leverage risk, the moderate relaxation of financing margin ratio has met the moderate financing needs of some investors, increased the overall amount of funds that can enter the market, and is conducive to promoting the function of margin trading and securities lending business and activating existing funds.
![The "Four Arrows" Policy and "Combination Fist" in Active Capital Markets Help Boost Market Confidence](https://a5qu.com/upload/images/3ae15c162fae4fdfbfa0a7676d89bab0.jpg)
Industry insiders point out that the implementation of the "combination punch" of "activating the capital market and boosting investor confidence" has released significant positive policy signals, which will help boost market confidence and inject more liquidity into the market.