- China’s stock market regulators will be meeting with leader Xi Jinping, Bloomberg reported.
- Markets have rallied on the news as it’s stoking hopes that China will roll out a forceful rescue plan.
- China and Hong Kong’s stock markets have lost nearly $7 trillion from their peaks in 2021.
China’s stock investors may finally be seeing a glimmer of hope.
On Tuesday, Bloomberg reported that regulators led by the China Securities Regulatory Commission, or CSRC, will be meeting Chinese leader Xi Jinping. The plan is to brief the country’s top leaders about the state of the markets, Bloomberg reported, citing unnamed people with knowledge of the matter.
The news about Xi’s personal attention — an unusual development — is stoking hopes of a forceful market rescue plan after China and Hong Kong’s stocks lost nearly $7 trillion from their peaks in 2021.
Benchmark indices in Hong Kong and China rallied on the news. Hong Kong’s Hang Seng Index closed 3.5% higher on Tuesday while the blue chip CSI 300 ended over 3% higher.
On Wednesday, the Hang Seng gained as much as 1.7% before giving up gains to trade 0.3% lower at 3:36 p.m. local time. Meanwhile, the CSI 300 was 1% higher.
The two benchmark indices are still lower year-to-date, but CSRC’s meeting with Xi is stoking hopes of “an imminent rescue plan” from Beijing to prop up China’s flailing markets, economists at Dutch bank ING wrote on Wednesday.
To be sure, China’s authorities have rolled out a flurry of measures recently to shore up its markets, including state-backed buying in the markets and curbs on short-selling.
But some analysts see these moves as less powerful than Xi’s personal participation in stabilizing the markets — even though it’s unclear if any new support measures will result from the meeting, Bloomberg reported.
“The news that the nation’s number one is holding a meeting is an encouraging development as it shows that the plunge is getting close to punching through the authorities’ comfort level,” Li Weiqing, a fund manager at Singapore-based JH Investment Management, told Bloomberg.
“It gives me the impression that they are doing everything they can, apart from calling out to the market — now is the time to buy,” added Li.
The CSRC did not immediately respond to a request from Business Insider for comment.
