The practices of margin lending and short selling, expected to bolster mainland stocks, will not be seen in the market for at least three months as the State Council gives priority to financial stability. Sources said the tools would not be allowed until the close of the Beijing Olympic Games in August because regulators remain divided over technical issues as they underscore the importance of risk control. 'It will be some time before the market-moving measure is officially launched,' said a China Securities Regulatory Commission official. 'Don't expect it before the Beijing Olympics.' There was speculation in April that Beijing would introduce margin lending and short selling this month to fuel trading, following a heavy-handed stamp duty reduction that buoyed the then slumping indices. A source said the State Council would take a gradual approach to avoid market turbulence, as the tools could spark speculative trading by mainland investors. Officials were studying margin trading models in overseas markets, but had yet to pick one for the domestic markets, the source said. Beijing was mulling setting up an intermediary company to conduct the transactions, but some officials had suggested allowing selected brokerages to offer the services in order to diversify risks, the source said. 'The mainland regulator is likely to start with a trial run, selecting qualified brokers to offer the tools in the initial stage,' said Joseph Kao, a senior analyst on financial products at Orient Securities. 'The potential market for margin trading is huge and unsuccessful implementation would cause severe damage to the securities industry.' CSRC chairman Shang Fulin said over the weekend that the mainland was actively preparing for the financial tools, but declined to provide a timetable. He said the regulator would consider a launch in a 'prudent manner'. Analysts said Beijing would be unlikely to unveil any new incentives as long as the benchmark Shanghai Composite Index remained above the 3,000-point level. Beijing slashed stock trading taxes by more than 60 per cent on April 23 when the index hovered above 3,000 points. Since then, the barometer has jumped 10.6 per cent, closing at 3,626.98 yesterday.