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szdaily -> Business/Markets -> 
Funds urged to support struggling listed firms
    2018-11-07  08:53    Shenzhen Daily

THE country’s securities regulator has urged mutual fund houses to support cash-strapped listed firms and help mitigate risks associated with pledged share financing, the China Securities Journal reported yesterday.

The China Securities Regulatory Commission (CSRC) has recently issued a notice to fund managers, encouraging them to use their own capital or raise public money to provide liquidity support to listed firms with prospects, the newspaper said.

The move comes amid a wider relaxation in Chinese investment rules in a bid by regulators to stem the stock market slide and ease margin call pressure on listed companies, many of which face the rising risk of ownership changes and business disruptions.

About US$620 billion worth of Chinese shares, or 10 percent of stock market capitalization, has been used as collateral against loans.

Eleven Chinese brokerages have committed 25.5 billion yuan (US$3.70 billion) to an asset management program that aims to eventually channel over 100 billion yuan into cash-strapped listed firms plagued by pledged share woes.

Local governments and insurers have also joined the rescue campaign, unveiling plans for a slew of funds aimed at aiding struggling listed firms.

Guoyuan Securities plans to raise 6 billion yuan in a “relief fund” in partnerships with insurers and State-owned firms, the Securities Times reported yesterday.

The CSRC said last week it encourages share buybacks and mergers and acquisitions by listed firms, and will guide more long-term capital into the markets.(SD-Agencies)

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