Calls?by analysts and industry experts for measures to restore investor confidence after the recent market sell-off seem to have been heard, as media reports said the government is likely to reduce its stamp duty on stock transactions soon.
Media reports said yesterday a proposal to cut the tax on stock trading has received government approval and will be announced soon, probably next month. But officials declined to comment on the reports.
Finance Minister Xie Xuren had said reforming the stamp tax would be "seriously researched" at a recent press conference during the annual session of the National People's Congress after the proposed bill was tabled.
China's major securities newspapers highlighted the urgent need for a tax adjustment yesterday as the government tries to ease investors' concern and stabilize the stock market.
China tripled the tax on stock trading to three yuan (42 US cents) per 1,000 yuan of share value on May 30 last year when the key Shanghai Composite Index soared to a high of 4,334.92 points.
But the tax drew attention after the Shanghai Composite Index tumbled nearly 40 percent from its peak of 6,124 points reached on October 16 last year. A two-day plunge ended on Tuesday also caused the erosion of more than two trillion yuan of share value.
"The top priority now is to rebuild market confidence and prevent jittery investors from dumping shares blindly," the Shanghai Securities News said yesterday.
Last year, stamp duties paid by investors on Chinese mainland stock transactions totaled 200.5 billion yuan, a jump of more than 10 times from the level in the previous year.
However, Zhang Qi, a Haitong Securities Co Ltd analyst, said that he believed the policy to cut the duty "will have a limited impact in boosting confidence as the overall market still faces other problems."
(Shanghai Daily March 20, 2008)
