Well, here we go again.
Another raft of measures to address China’s stock market plunge have been unveiled by policymakers earlier today.
The China financial futures exchange has raised the margin requirement for short futures positions ONLY for the CSI 500 index from 10 to 20% starting Wednesday. From Thursday this will increase to 30% of position size, according to Xinhua. No margin increase has been made to long positions, despite increased volatility.
Elsewhere, in a report from Xinhua, qualified insurance companies will be allowed to invest up to 10 percent of their assets in a single blue chip, increasing from the previous 5 per cent stipulation, according to a notice issued by the China Insurance Regulatory Commission.
The statement also notes the limit on the ratio of their equity assets will be further raised to 40 percent from the previous 30 percent, according to the notice.
In order to restore market confidence in small-cap stocks, those that have seen losses grow to more than 40% over the past month, China’s stock market regulator, the CSRC, also stated that China Securities Finance, a subsidiary of the regulator, will continue to stabilise the share price of blue chips while it will increase the buying of small and medium sized stocks in a bid to solve the nervous market situation. according to an article in the South China Morning Post.
At present, like other measures announced to stem the market rout, they are failing to address the selling pressure. The benchmark Shanghai Composite Index, approaching lunch, is off by 4.8%.