China will reduce stock trading fee by 20%
By Feng Jianmin |
August 3, 2012, Friday
|
Print Edition
Print Edition
CHINA will cut the transaction fee for trading yuan-denominated stocks on the mainland's exchanges by 20 percent as part of efforts to restore sentiment and boost the sluggish equity market, which is trading at a three-year-low.
China Securities Depository and Clearing Corp will also lower the registration fee for A-share transactions on the Shanghai bourse by 20 percent, the China Securities Regulatory Commission said yesterday in a statement. The trading costs on the mainland's four major futures exchanges will drop between 6.25 percent to 50 percent, according to the statement.
The measures, the third in a series of similar cuts since April, will take effect on September 1.
The new cut will save stock investors 600 million yuan (US$94.6 million) in the next four months. When combined with similar cuts since April, the measures will save 6.7 billion yuan this year.
"The three cuts... reduce costs and reflect the regulator's confidence and determination to protect the interests of investors and boost the healthy development of the market," the statement said.
The latest cut comes after the benchmark Shanghai Composite Index dropped 14 percent from this year's high on March 2.
The securities regulator said the current drop is due to panic selling and the positive fundamentals of the Chinese stock market have not changed.
President Hu Jintao and Premier Wen Jiabao have pledged to further bolster the economy from the current slowdown.
"The moves clearly show policymakers will support the stock market," said Li Daxiao, chief analyst of Yingda Securities. "It will help stabilize the market."
But Yu Fenghui, an independent economic commentator, said improving the regulation and transparency of the stock market are more important.
Additionally, the regulator said it is seeking cooperation with other government bodies to cut the stamp duty on trading shares, a move that could reduce trading costs and potentially stimulate the market.
The last stamp duty cut was on September 19, 2008. It sent the Shanghai shares up nearly 10 percent that day, but did not stop the index from hitting a record low one month later.
China Securities Depository and Clearing Corp will also lower the registration fee for A-share transactions on the Shanghai bourse by 20 percent, the China Securities Regulatory Commission said yesterday in a statement. The trading costs on the mainland's four major futures exchanges will drop between 6.25 percent to 50 percent, according to the statement.
The measures, the third in a series of similar cuts since April, will take effect on September 1.
The new cut will save stock investors 600 million yuan (US$94.6 million) in the next four months. When combined with similar cuts since April, the measures will save 6.7 billion yuan this year.
"The three cuts... reduce costs and reflect the regulator's confidence and determination to protect the interests of investors and boost the healthy development of the market," the statement said.
The latest cut comes after the benchmark Shanghai Composite Index dropped 14 percent from this year's high on March 2.
The securities regulator said the current drop is due to panic selling and the positive fundamentals of the Chinese stock market have not changed.
President Hu Jintao and Premier Wen Jiabao have pledged to further bolster the economy from the current slowdown.
"The moves clearly show policymakers will support the stock market," said Li Daxiao, chief analyst of Yingda Securities. "It will help stabilize the market."
But Yu Fenghui, an independent economic commentator, said improving the regulation and transparency of the stock market are more important.
Additionally, the regulator said it is seeking cooperation with other government bodies to cut the stamp duty on trading shares, a move that could reduce trading costs and potentially stimulate the market.
The last stamp duty cut was on September 19, 2008. It sent the Shanghai shares up nearly 10 percent that day, but did not stop the index from hitting a record low one month later.
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