Regulators in China reportedly mulling means to temper stock market frenzy

Chinese regulators are weighing measures to cool a surging stock market rally that has added about US$1.2 trillion (HK$9.36 trillion) in market value since early August, amid growing concerns over speculative trading and retail investors’ exposure to sharp swings, Bloomberg reported.

Proposals submitted to senior decision-makers in recent weeks include lifting certain short-selling restrictions, though it remains unclear if or when any will be adopted, people familiar with the matter said.

At a meeting in late August, China Securities Regulatory Commission chairman Wu Qing emphasized the regulator’s commitment to maintaining market stability. Regulators have instructed banks to step up scrutiny after finding that some investors had funneled consumer and online loans into stock trading, according to the report.

Brokerages were also told to refrain from aggressively promoting round-the-clock account-opening services, it added.

Social media platforms were similarly warned against excessively promoting content on the bull market, record margin lending, or the flow of bank deposits into stocks, to curb exuberance among inexperienced investors, the people said.

New A-share trading accounts reached 2.65 million in August, up 35 percent from July and more than 1.6 times the level a year earlier, according to the Shanghai Stock Exchange.

STAFF REPORTER