China’s State Media Join Brokerages Saying Buy Equities 

China’s state-run media are trying to do something the securities industry has failed to accomplish for much of the past three years: get the world’s biggest population to buy more stocks.

The official Xinhua News Agency published at least eight articles this week advocating equity investing. Authorities have also cut trading fees, made it cheaper to open new accounts and organized investor presentations by the biggest listed banks in the past two weeks.

The media campaign “did influence my purchase,” Huang, a 26-year-old who works in the finance industry in the northeastern city of Harbin, said after shifting more than 20,000 yuan ($3,257) into shares last week. “Also, our stock market had slumped for so long.”

Chinese policy makers are trying to rekindle interest in stocks after the Shanghai Composite Index (SHCOMP) lost $460 billion of market value in the three years through May, the most worldwide, and investors liquidated almost 5 million trading accounts.

The government’s promotion of shares, which follows forecasts for gains this year from brokerages including Citigroup Inc. and Morgan Stanley, may already be having an impact.

The Shanghai Composite rose to a 15-month high yesterday and has gained 12 percent since the end of May.

“The government is indeed encouraging stock investment,” Zeng Xianzhao, an analyst at Everbright Securities, said by phone from Chongqing yesterday. “They need the market to be vibrant to encourage foreign funds into the country.”

Regulators also announced plans to allow investors to consolidate their accounts covering stocks, mutual funds and other securities.

 

Source: bloomberg

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