July 5, 2015 - 2:27PM
BEIJING – China has frozen new share listings and announced it will set up a fund to stabilise its nose-diving sharemarkets in the latest raft of urgent moves indicating the growing concern over the potential for the country's stock panic to spread and threaten the world's second-largest economy.
Official news agency Xinhua reported late on Saturday that 28 companies had agreed to withdraw their initial public offerings (IPOs) despite having already gained approval from Shanghai and Shenzhen trading authorities.
That came just hours after a statement from the Securities of Association of China announcing 21 of the country's largest brokerages had agreed to pledge the equivalent of 15 per cent of their net assets – or no less than 120 billion yuan in total – to invest in blue-chip investment stocks.
The group of 21 brokers said the economic fundamentals that had justified the stock market's rally before the rout hadn't changed.
"It is therefore our duty to unite in stabilising this market," the statement said.
But the plunge in Chinese equities over the past three weeks have reached close to $3 trillion in market value, about 10 times Greece's gross domestic product last year – and nearly double Australia's.
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