When mainland securities watchdog chief Zhou Zhengqing visited Shanghai recently, he was grilled by cash-strapped brokerages on when he would relax restrictions on their fund-raising sources. Rumours have circulated since December the China Securities Regulatory Commission (CSRC) was working on new measures for the houses to raise funds to make up for the ban on them from using clients' money - traditionally a key source of funds - to finance their operations. To comply with the law, they are forced to unload shares bought with clients' money, which is also used to help fund underwriting mandates and daily operations. The capital flight has, in turn, dampened market sentiment, which is slowing the pace of new listings. Little wonder impatient houses were pushing to find out from Mr Zhou if there was substance to the rumours. The CSRC chief reportedly assured them there was. 'We have heard mutterings the CSRC only 'creates the roar of the thunder but fails to deliver the rain or the sound of footsteps on the stairs, but does not present the person',' he said. 'Now, I can tell you very responsibly that we have finalised a package of measures, which would be presented in due course.' He did finally deliver something at the weekend - but not in the way many had expected. In a strategy apparently aimed at lengthening a market rally, he released only one weapon in his market-boosting arsenal - the approval for a regional brokerage to expand its registered capital. Eight other brokerages are awaiting similar approvals. That was a departure from past practice, when market-boosting measures were announced in one go, a strategy which was not often successful in sustaining a rally because investors bought on rumours and sold on announcement of the news. Now, by staggering the announcement of the measures, Mr Zhou hopes to fuel a rally strong enough to ensure more listings of new shares by state enterprises. 'We will see other market-boosting measures announced as and when the market requires them,' said Shenyin & Wanguo manager Gui Haoming. The CSRC reckoned that after three days of big rises, the markets might need a little push to stretch investor confidence. Thus one move among the proposed measures, which include allowing brokerages to make collateral-backed bank loans, and to tap the interbank treasury bond repurchase markets. The single measure was enough to lure more investors to the markets. Yesterday, the markets rose sharply, with combined turnover of the Shanghai and Shenzhen markets hitting about 26 billion yuan (HK$24.2 billion), about eight billion yuan higher than Friday's. 'The markets are really hot now; it is no point trying to add too much fuel to them. It is better to ensure the markets are stable for a while to allow new shares to be issued,' Shenyin & Wanguo analyst Qian Qimin said. A Haitong analyst said the rally could run out of steam if corporate results and the economic picture did not improve towards the end of the year. 'All these measures are fine. But at the end of the day, we need to see an improvement in the performance of the listed companies, and in the economy,' he said. Beijing wanted a sustained rally to maintain the pace of listings and, indirectly, the speed of state-sector reform. Initial public offerings have been cut from four a week for the best part of last year to two a week for about six months. Early last week, when market sentiment hit the pits and mutual funds plunged to historic lows, initial public offers were suspended altogether. On Wednesday, renewed rumours of new measures for brokerages spread like wild fire, triggering a three-day buying spree.