The Standing Committee of the People's Republic of China releases a strong signal to stabilize the capital market

2024-01-24

The recently held executive meeting of the State Council listened to reports on the operation of the capital market and work considerations. Industry insiders said that this meeting further demonstrates the central government's high attention to the capital market and its determination to stabilize the capital market. The meeting targeted the current problems facing the A-share market and helped boost market confidence. The State Council emphasized the need to further improve and perfect the basic system of the capital market, pay more attention to the dynamic balance of investment and financing, vigorously improve the quality and investment value of listed companies, increase the entry of medium and long-term funds into the market, and enhance the inherent stability of the market. We need to strengthen the supervision of the capital market, have zero tolerance for illegal and irregular behavior, and create a standardized and transparent market environment. We need to take more powerful and effective measures, focusing on stabilizing the market and confidence. To enhance the consistency of macroeconomic policy orientation, strengthen innovation and coordination of policy tools, consolidate and enhance the positive trend of economic recovery, and promote the stable and healthy development of the capital market. Industry insiders believe that this National Regular Meeting is the first time a new government has specifically listened to a report on the operation of the capital market and made clear arrangements, fully reflecting the significant significance of maintaining stability in the capital market for the overall economic and social situation. "Since 2024, the pace of market decline has accelerated, and there have been some liquidity issues and market failures, including passive liquidation. It is necessary to introduce some strong measures to stabilize market expectations and boost investor confidence. The convening of this National People's Congress has emphasized the position of the capital market and also demonstrated the importance of maintaining stability in the capital market for the overall economic and social situation, which helps to enhance market confidence." Chen Guo, Chief Strategy Analyst of CITIC Securities, told Economic Reference News. Zheng Kai, Joint Chief Analyst of the Development Research Center of Guangfa Securities, also believes that since the beginning of 2024, the market has once again been affected by multiple factors and experiencing weak fluctuations. At this time, the National People's Congress will once again mention the capital market, especially the issue of balancing investment and financing, which will help stabilize market fluctuations and boost investor confidence. Li Zhan, Chief Economist of China Merchants Fund Research Department, stated that at the current level, it is necessary for macro departments to coordinate and implement more effective measures to stabilize the market and confidence. The requirements put forward by the National People's Congress for the capital market this time involve a wider range. It is not only required to improve the basic system of the capital market, pay more attention to the dynamic balance of investment and financing, vigorously improve the quality and investment value of listed companies, increase the entry of medium and long-term funds into the market, enhance the internal stability of the market, but also emphasizes the need to strengthen capital market supervision, zero tolerance for illegal and irregular behavior, and create a standardized and transparent market. On this basis, we need to take more powerful and effective measures, focus on stabilizing the market and confidence, enhance the consistency of macroeconomic policy orientation, strengthen innovation and coordination of policy tools, consolidate and enhance the positive trend of economic recovery, and promote the stable and healthy development of the capital market. The National Standing Committee of the Communist Party of China proposed to enhance the inherent stability of the market. Industry insiders believe that this requires joint efforts from both the investment and financing sides to establish a long-term funding mechanism. "The improvement of internal stability in the market requires the joint realization of both internal environment and external mechanisms." Zheng Kai

Edit:Hou Wenzhe    Responsible editor:WeiZe

Source:Economic Information Daily

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