China's stock markets brace for more falls if latest support measures fail
Central bank to provide liquidity support for state-backed margin lender in latest series of moves to shore up confidence in volatile market
Equity investors battered by a brutal three-week sell-off in mainland Chinese stocks face the prospect of fresh falls today if a slew of initiatives by Beijing to support the volatile market fail to restore confidence.
The latest move - a commitment from the People's Bank of China to provide liquidity support for state-backed margin lender China Securities Finance Corp - came after a weekend meeting of the State Council, China's cabinet, which was chaired by Premier Li Keqiang .
The move underscores the extent of the state's exposure to a debt-driven unwind that has wiped some US$2.8 trillion from mainland stock markets in a three-week-long rout - blamed by some on margin calls.
The China Securities Regulatory Commission (CSRC) did not say how much money the central bank would provide or how long the measure would last.
"The series of supportive measures issued by Beijing over the weekend will not put a floor under the fall in 'A' shares," Li Kwok-suen, a fund manager at Phillip Capital Management, told the .
The CSRC said on Friday it would slow the pace of new share offerings and on Saturday 28 companies agreed to withdraw share sales already approved. Separately, the mainland's 21 biggest brokerages agreed to form a 120 billion yuan (HK$150 billion) fund to prop up the market and 25 mutual fund firms pledged to inject capital into vehicles they manage.
