China to revive stock market with stamp duty cut, reports say
Published: 09:00 25 Aug 2023 EDT
China is planning to cut stamp duty on stock trading by as much as half to help revive confidence in the country’s stock market, Reuters reported, citing three people familiar with the matter.
A draft proposal was submitted to the Chinese cabinet by regulators including the Ministry of Finance earlier this month, the news agency said, citing two of the sources who weren't named as they aren’t authorized to speak to media.
A decision could be announced as soon as Friday.
Stamp duty on securities trading is currently at 0.1% and a reduction would be the first since 2008. The proposal suggested a cut of either 20% or 50%, with 50% the most likely, the sources told Reuters.
The news agency said there was no response to a faxed request for comment from the State Council Information Office, the Ministry of Finance or the China Securities Regulatory Commission (CSRC).
The CSI 300, an index that replicates the performance of the top 300 stocks on the Shanghai Stock Exchange and the Shenzhen Stock Exchange, has fallen 4.76% year to date and is down about 12% from its recent peak at the end of January.
Hong Kong’s Hang Seng index has entered a bear market after falling more than 20% since late January.
Analysts have cut their growth forecasts to below 5% due to a downturn in the property market and and lack of measures to stimulate domestic demand in the world’s second-largest economy.
Contact the author at stephen.gunnion@proactiveinvestors.com
