As the Chinese stock market continued it downward trend, the government unleashed more weapons in its armory to fight the bears and prevent a market crash.
Some bank strategists have noted that the Chinese government still has aces up on its sleeve to bolster investor confidence and keep stock prices from further falling down.
According to Xinhua news agency, state-owned firms have been ordered not to sells shares in their listed firms, while the central bank reiterated Wednesday its commitment to provide liquidity support for the market.
Instead of selling shares, state-owned firms were encouraged to buy more shares in the market, Xinhua said.
In a separate news report, Xinhua said the PBOC pledged to provide funds to China Securities Finance Corp (CSF) so the agency will have the money to support brokerages in funding margin loans of those who are investing in the equities market.
For its part, the insurance regulator relaxed rules on equity investments of insurers. Qualified insurers can now invest up to 10% of their assets in a single blue chip firm, double than the previous 5% cap, Xinhua said.
Meanwhile, the China Financial Futures Exchanges raised the margin requirements for sell orders on CSI 500 index futures. Traders are now required to pay margin requirements equivalent to 20% of the contract value starting today. Previously, the margin requirement was only 10%, Xinhua said.
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