China asks brokerages to boost market and buy back shares

SHANGHAI — China’s securities regulator asked brokerages to step up their support for share prices by contributing 100 billion yuan (S$22.2 billion) to the nation’s market rescue fund and increasing stock buybacks, according to people familiar with the matter.

The China Securities Regulatory Commission gave the order on rescue-fund contributions at a meeting with representatives of 50 brokerages on Saturday (Aug 29), which CSRC Chairman Xiao Gang also attended, said the people, who asked not to be identified because the meeting hasn’t been made public. The regulator encouraged listed brokerages to buy back shares worth as much as 10 per cent of their total market value, the people said.

China revived its stock-market rescue program on Aug 27 after the government’s absence from the market earlier in the week contributed to the biggest two-day sell-off since 1996. Policy makers are trying to bolster shares before President Xi Jinping takes the stage in a World War II victory parade this week.

The CSRC meeting was reported earlier by Cailian. The regulator didn’t immediately respond to a faxed request for comment.

China’s Shanghai Composite Index dropped 2.8 per cent at 10.28am local time. BLOOMBERG