“For the objective of a supporting the stock market’s stable development, the People’s Bank of China will actively assist China Securities Finance to have liquidity by way of repo, collateral lending or issue financial debt papers”, the PBOC said in a statement posted on its website on Wednesday.
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As the market continued to nose dive, controlling shareholders and managers who hold more than 5 percent of a company’s shares were ordered to not reduce their holdings in the coming six months.
The Shanghai Composite Index was down 5.1% to 3,532.84 at around 3am GMT.
Directors, supervisors and senior managers will not be restricted by a window period if they are to increase holdings in their own listed companies, should the shares drop by more than 30% within 10 consecutive trading days, the statement said.
Separately, the state news agency, Xinhua, reported a police investigation into “malicious” short-selling of stocks.
At noon, Japan’s Nikkei225 was down 0.69 percent and South Korea’s was off 0.64 percent. Hong Kong closed down about 6 percent.
Beijing’s interventionist response has also raised questions about its ability to enact market liberalisation steps that are a centrepiece of its economic reform agenda.
Vice Minister of Public Security Meng Qingfeng led a team and visited the head office of China Securities Regulatory Commission (CSRC) on Thursday morning, a sign that authorities will severely punish operations that violate laws and regulations.
But the barrage of emergency measures had done little to arrest the slide in a market that has begun to seize up, with around half the companies listed on Shanghai and Shenzhen exchanges opting to escape the rout by having their shares suspended.
Nevertheless, commodities that are sensitive to the outlook for the world’s second biggest economy have been hit, with copper prices touching a six-year low on Wednesday and iron ore tumbling to a 10-year low.
The country’s cabinet said on Wednesday it planned to spend 250 billion yuan ($40.3 billion) to foster growth in areas of the economy most in need of support and would accelerate construction of big public services projects.
The central bank on Wednesday vowed to steady stock market and ensure that no systematic and regional financial risks will occur, providing support for the CSF to get sufficient liquidity.
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The latest moves include allowing insurance companies to invest more assets in stocks and a programme to buy the shares of smaller companies.
