Business

Alibaba, JD.com and other Chinese stocks rise. What’s behind the rally?

Chinese stocks rose on Monday after the government announced it would cut trade taxes and take other steps to boost its capital markets.

China’s Ministry of Finance announced on Sunday that it would halve the stamp duty on securities transactions to 0.05% from Monday. It is the first time since 2008 that the tax has been reduced.

The measure is designed…

Chinese stocks rose on Monday after the government announced it would cut trade taxes and take other steps to boost its capital markets.

China’s Ministry of Finance announced on Sunday that it would halve the stamp duty on securities transactions to 0.05% from Monday. It is the first time since 2008 that the tax has been reduced.

According to the Chinese government-backed newspaper Global Times, the measure is intended to “stimulate the capital market and boost investor confidence”. China’s securities regulator also plans to restrict new listings, which could help balance supply and demand, and ease margin rules for buying securities.

Hong Kong’s Hang Seng Index rose 1.0%. Big tech companies were among the gainers, with Alibaba (Ticker: BABA) up 1.7% and JD.com (JD) up 1.0%. in local trade.

Alibaba’s American Depositary Receipts are up 2.2% in early trade and JD.com’s ADRs are up 1.7%.

Advertisements – Scroll to continue

The move is the latest in a series of efforts to boost Chinese investor confidence amid the country’s flagging economy and ongoing US-China tensions.

Recent proposals from the China Securities Regulatory Commission ranged from providing longer trading hours to encouraging share buybacks by listed companies. However, such reforms may not be enough to build long-term confidence from foreign and domestic investors alike, who are alert to the possible fallout from the company’s ailing real estate sector, which accounts for 70% of Chinese household wealth.

Write to Adam Clark at [email protected]

Source: www.barrons.com

Show More

Robert Wilson

Business & economics analyst. Breaking down intricate financial trends for informed decision-making.

Read Next

Back to top button