The mainland's securities regulator is encouraging listed companies to buy back and cancel some of their shares, the latest effort to boost stock prices and bolster investor confidence.
The official China Securities Journal, citing an unidentified official with the China Securities Regulatory Commission (CSRC), reported yesterday that listed firms with strong cash positions would be urged to repurchase a portion of their shares because some of the companies' stocks had been undervalued amid the market fall.
A CSRC press officer confirmed the report yesterday, while refusing to elaborate on how the policy might be implemented.
The regulator has been striving to underpin the weak market since Guo Shuqing, a former China Construction Bank chairman, was appointed the regulatory chief late last year.
But the downward trend has continued as investors have been battered by a slowing domestic economy and deteriorating corporate earnings.
The unidentified CSRC official told the China Securities Journal that many of the mainland-listed companies, with price-to-book value ratios of nearly 1, were good buys.