CRI听力:China Brokers Vow to Stabilize Stock Market

At a meeting, China's 21 major securities brokers vowed to "firmly" stabilize the country's stock market, which has been shaken by continued plunges.

According to a joint statement, the brokers will spend no less than 120 billion yuan, or 15 percent of their total net assets, on exchange traded funds that track the performance of blue chip stocks.

The firms promise not to sell the stocks they held as of July 3 and pledged to buy more, until the benchmark Shanghai Composite Index returns to 45-hundred points.

They will also actively repurchase stocks in their own company from the market and encourage major stock holders to increase their stakes.

China's top three brokers -- CITIC Securities, Haitong Securities and Guotai Junan Securities -- were among the 21 signatories of the statement.

Meanwhile, the Securities Association of China issued a statement, calling on all brokerages to view the economic situation and capital market in a correct way and take similar actions to bolster the ailing market.

Guo Shuhua, securities analyst with First Capital, says the move is much-needed at the moment.

"On the one hand, if the government doesn't make a move to shore up the market now, it will be too late. But on the other hand, the market is likely to react very slowly to the favorable policies that have been put out, so I feel a portfolio policy is needed."

Guo says the markets need a "strong boost" to stabilize the situation and restore investor confidence.

"As you know a single policy won't start leveling its effects in one or two days of trading. But if the government continues easing policies, the downward pressure will finally ease, allowing the stock market to rise once again."

Saturday's meeting is among the latest attempts to break the losing streak in the mainland market that has seen the benchmark Shanghai Composite Index dive by more than 28 percent over the past three weeks from a 7-year high at around 52-hundred.

Earlier, China's central bank has lowered both the interest rate and reserve requirement ratio for banks to inject liquidity into the market.

The Shanghai and Shenzhen stock exchanges have announced a roughly 30-percent cut in stock transaction fees, while the China Securities Depository and Clearing Company announced a reduction in stock transfer fees by about 33 percent from Aug. 1.

The China Securities Regulatory Commission has also vowed to investigate suspected manipulation of the stock market.

But none of the supportive policies have so far worked as expected.

The Shanghai Composite Index slumped over 5.7 percent on Friday to finish below the psychological threshold of 3,700 points.