CRI听力:China Stocks Rally on Government Support

An investor uses a mobile phone in front of an electronic board showing stock information at a brokerage office in Beijing, China, July 9, 2015. China shares rebounded sharply on Thursday, with the Shanghai Composite index posting its biggest percentage gain in six years, as a fresh round of government support measures stemmed panic selling. [Photo: CFP]

Chinese stock markets staged a strong rally on Thursday, recovering from a steep drop in the past three weeks, as the latest government prop-up measures appear to be effective.

0710stock 

China Securities Depository and Clearing Company Limited announced on Thursday night that both the transaction and scrip fees in the A-share market will be cut by 30 percent, starting next month.

This is the latest supportive measures made by the central government to lower trading costs for investors and further ease the stock market.

On Thursday, six monitored insurance companies made net purchases of stocks and funds with a combined value of more than 15 billion yuan.

That same morning, the China Banking Regulatory Commission announced it will allow banks to extend mortgage loans that use share funds as collateral to prop up the stock market.

At the end of Thursday, the benchmark Shanghai Composite Index was up 6 percent.

The Shenzhen Component Index surged 4 percent.

The ChiNext Index, tracking China's Nasdaq-style board of growth enterprises, climbed 3 percent.

Tang Yonggang, an analyst at Shenyin Wanguo Securities says the market shows signs of stabilizing as the regulator came to the rescue of small-caps, especially those on the ChiNext, easing the liquidity crisis and giving investors a much-needed dose of confidence.

"Individual stocks on ChiNext reached their daily limits, which have greatly influenced market confidence. We can see this has rapidly provided incentives for growth enterprises in emerging industries. Judging from the mainboard, aerospace and military industry stocks took the lead to pick up, which has significantly helped boost the public's confidence in the market. "

In the meantime, Chinese police joined the securities regulator to investigate "malicious short selling." 

Liu Dong, deputy director of Economic Crimes Investigation Bureau under Ministry of Public Security, says cracking down on illegal and criminal activities in securities and futures areas in accordance with law is the duty of public security departments.

"We will increase close cooperation with securities regulators. According to the division of labor, we'll work together to crack down on alleged criminal activities. We'll also investigate and deal with illegal behaviors of spreading rumors through internet and contribute to maintaining market economic order."

Meanwhile, the State Council, China's cabinet, has also assured that the government had plenty of tools at its disposal to restore confidence in the economy.

The announcement comes after a cabinet meeting presided by Premier Li Keqiang on Thursday.

For CRI, I'm Niu Honglin.