Business
Chinese Stock Regulator Calls for Asset Revamp to Elevate Market Value: Unveils Fast-Track M&A Approval and Major Stimulus Measures Amid Economic Slowdown
The Chinese stock regulatory body is encouraging publicly traded companies to restructure their assets and enhance their market worth. The CSRC has outlined strategies that include expedited sanctioning for merger and acquisition operations by major corporations, aiming to enhance the attractiveness of the stock market.
Wu Qing, the head of CSRC, initially revealed the policies during a press conference held in conjunction with the country's financial regulators. During this conference, the central bank also announced the allocation of 800 billion yuan (approximately US$114 billion) for new stock acquisitions, and committed to reducing both interest and mortgage rates.
The introduction of new economic stimulus measures was a response to China's primary stock index plunging to its lowest point in over five years this month, coupled with all major economic indicators in August underperforming. The Federal Reserve's recent half-point reduction in interest rates has provided China with more flexibility to intensify its policy relaxation without devaluing the yuan or causing capital to flow out of the country.
"James Wang, who leads China strategy at UBS Group in Hong Kong, stated that the announcements are beneficial for the wider stock market. They bring the possibility of increased fund inflows, a higher rate of buy-backs, and long-term improvements in corporate governance."
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