China Cuts Stock Trade Tax, Tightens IPOs to Boost Market

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(Bloomberg) -- China lowered the stamp duty on stock trades for the first time since 2008 and pledged to slow the pace of initial public offerings, among a slew of new measures to woo investors back to its flagging equities market. Most Read from BloombergMarkets Ready for Swings After High-Rates Mantra of Jackson HoleTwitchy Traders Have S&P 500 Comebacks Fizzling at Historic PaceTrump Doesn’t Look So Invincible in Post-Debate PollsChina Cuts Stock Trade Tax, Tightens IPOs to Boost MarketThree

The levy charged on stock trades will drop from 0.1% to 0.05% as of Aug. 28, the Ministry of Finance said in a statement Sunday, in a move to “invigorate capital markets and boost investor confidence.”

Authorities have been trying to dispel worries about the economy triggered by a slumping property market, trust defaults and weak consumer spending. Foreign investors sold mainland China stocks on a net basis for 13 consecutive sessions through Wednesday, the longest stretch ever, data compiled by Bloomberg show.

China last cut the stamp duty in April 2008, reducing it to 0.1% to support the market after a plunge, spurring a bull run the following year. The year prior, in May 2007, it raised the rate to 0.3% to cool a rally that was drawing more than 300,000 new investors a day.Wang added that a turnaround in the A-share market would not happen unless Beijing adopts more “bazooka” measures, such as the 4 trillion yuan stimulus package it rolled out in 2008.

 

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