China securities regulator vows to strengthen long-term investment incentives

© Reuters. Investors wait for China’s stock market to open in front of an electronic board at a brokerage house in Beijing, China, January 8, 2016. REUTERS/Jason Lee/File Photo

SHANGHAI (Reuters) – China’s securities regulator will strengthen incentives for “countercyclical investment” and guide institutions to practice long-term investment, it said on Friday, seeking to boost the country’s faltering stock market.

China’s stock benchmark is down 4.3% since the start of the year, hovering around close to five-year lows amid weak investor sentiment in the face of the country’s sluggish post-pandemic recovery.

The China Securities Regulatory Commission (CSRC) also said it will balance the development of primary and secondary markets, and continue the “countercyclical adjustment” of initial public offerings (IPOs).

Beijing has announced a slew of measures to support the market since last August, including reducing trading costs, slowing the pace of IPOs, and encouraging margin financing, which so far failed to boost investor confidence.

The latest economic indicators showed a mixed picture for China’s recovery. Exports grew at a faster pace in December, while deflationary pressures persisted last month, keeping alive expectations for more policy easing measures.