China’s Premier Li Qiang orders authorities to attract long-term capital to stabilise stock market after trillion-dollar rout
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China’s Premier Li Qiang ordered authorities to find ways to attract long-term investors to the country’s capital markets, after stock indices in Shanghai, Shenzhen and Hong Kong plumbed fresh lows.
The meeting emphasised the need to further improve the basic system of the capital markets, pay more attention to the dynamic balance of investment and financing, vigorously improve the quality and investment value of listed companies, increase the entry of medium and long-term funds into the market, and enhance the inherent stability of the market, according to Xinhua.
The meeting chaired by Li was the clearest sign of the government’s attempt at putting a floor on plunging stock markets on the mainland and Hong Kong, which have lost more than US$1 trillion in combined capitalisation so far this year, according to Bloomberg data.
The Hang Seng Index surged 2.6 per cent on Tuesday, the best gain in over two months. The stock benchmark slipped 2.3 per cent to below the 15,000-level on Monday, a psychological threshold seen during the October 2022 slump, before China abandoned its zero-Covid policy the following month.
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Stocks listed on the mainland’s bourses also rallied after a sharp decline on Monday. The Shanghai Composite Index rebounded 0.5 per cent on Tuesday, after falling 2.7 per cent to a level not seen since April 2020, while the all-share Shenzhen Composite Index climbed 1.4 per cent after plunging 4.5 per cent on Monday. Foreign investors have pulled more than 213 billion yuan (US$30 billion) from onshore stocks over the past six months.