Exclusive-China plans to cut stamp duty on stocks by up to 50% to revive confidence-sources
HONG KONG/BEIJING (Reuters) -Chinese authorities are planning to cut stamp duty on stock trading by as much as 50%, three people with knowledge of the matter said, in a further attempt to revitalise the country's struggling stock market.
Regulators including the Ministry of Finance, under the guidance of the State Council, submitted a draft proposal to the cabinet earlier this month, said two of the people, adding a decision could be announced as soon as Friday.
The proposal to reduce the current 0.1% stamp duty on securities trading suggested a cut of either 20% or 50%, which would be the first such reduction since 2008, the two people said.
The quantum of the cut, which has not been reported before, is likely to be set at 50%, they said.
All the sources declined to be identified as they were not authorised to speak to the media.
The State Council Information Office, which handles media queries on behalf of the government, did not respond to a faxed request for comment. The Ministry of Finance and the China Securities Regulatory Commission (CSRC) did not respond either.
The proposed cut comes after China's leaders vowed in late July to reinvigorate the world's second-largest stock market, which has been reeling as the country's economic recovery flags and a debt crisis in the property market deepens.
«Such a policy will likely give a short-term boost to the market, but won't have much effect over the long run. The rebound could last for just two to three days, or even shorter,» said Xie Chen, fund manager at Shanghai Jianwen Investment Management Co.
«A reversal in the long-term trend of the market would be triggered by expectation of economic improvement, rather than stamp duty cuts.»
The country's blue-chip CSI300
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