THE central bank said yesterday that it will support stability in the stock market and guard against systematic and regional financial risks.

    China shares have plunged some 30 percent in three weeks despite a flurry of market stabilization measures.

    The People’s Bank of China will provide sufficient liquidity to China Securities Finance Corp. (CSF), the State-backed margin finance company, via various channels, the central bank said in a statement on its website.

    The central bank will “closely watch” the movement of the stock market and safeguard the bottom line that no systematic and regional financial risks will occur, it said.

    The CSF will purchase more shares of small- and medium-sized listed companies to increase stock market liquidity, said the China Securities Regulatory Commission, the country’s securities watchdog.

    As a result, the ChiNext Index, tracking China’s Nasdaq-style board of growth enterprises, rose 0.51 percent to end at 2,364.05 points. Ten minutes after the opening, not a single stock rose in Shanghai, and only three gained in Shenzhen. More than 1,000 shares on the two bourses dived by the daily limit of 10 percent.

    The CSF is the only institution to provide margin financing loans to qualified securities companies. It works to facilitate the margin transactions of securities companies in market operation methods and improve China’s margin transactions system.

    China’s insurance regulator eased rules for insurance companies to put money in the market. Qualified insurance companies will be allowed to invest up to 10 percent of their assets in a single blue chip, up from the previous 5 percent, said a notice from the China Insurance Regulatory Commission.

    China Financial Futures Exchange said it will raise the margin requirements for sell orders on CSI 500 index futures to curb speculation. Traders must pay margin requirements equivalent to 20 percent of the contract value starting from yesterday’s clearing, up from the previous 10 percent.

    The State asset regulator ordered the country’s centrally administered State-owned enterprises (SOEs) not to sell shares in their listed companies amid the “abnormal market volatility,” joining the concerted efforts to stem massive sell-offs in the stock market.

    The State-owned Assets Supervision and Administration Commission also encouraged the SOEs to purchase more shares to stabilize prices.

    The benchmark Shanghai Composite Index tumbled to a three-month low yesterday, sliding 5.9 percent to 3,507.19 at the close. With at least 1,331 companies halted on mainland exchanges and another 747 down by the 10 percent daily limit, sellers were locked out of 72 percent of the mainland market. (SD-Agencies)

    (More on P10)