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China halves stamp duty on securities transactions, lowers margin requirement for buying stocks to boost investor confidence
- The Ministry of Finance and the State Taxation Administration said the reduction in stamp duty will take effect from Monday
- To further boost investor confidence, China’s securities regulator has moved to lower margin requirements for buying stocks to 80 per cent
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China’s stamp duty on stock transactions will be cut in half from Monday, the first such reduction since the 2008 global financial crisis, as part of the government’s latest stimulus measures in response to the country’s uneven economic recovery.
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The Ministry of Finance and the State Taxation Administration announced on Sunday that the 0.1 per cent rate for the stamp duty on securities transactions “will be halved” from August 28 “to invigorate the capital market and boost investor confidence”.
On the same day, the China Securities Regulatory Commission (CSRC) unveiled separate stimulus measures that included lowering margin requirements for investors to buy securities to 80 per cent from 100 per cent, which would take effect after the market close on September 8.
“These policies will only help in the short term, as investors are still concerned about China’s fundamental problems including the property crisis and the economic slowdown,” said Kenny Wen, KGI’s head of investment strategy based in Hong Kong.
Still, other market analysts expect the stamp duty reduction to have an immediate positive impact.
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