SHANGHAI – Chinese bourses have set daily restrictions on net share sales by hedge funds and large retail investors, four sources said on Friday, as Beijing steps up support for its stock markets in an intensifying trade war with the United States.
Two investor sources said a soft limit on daily net sales by individual hedge funds and big retail investors – implemented through verbal warnings from brokerages – had been set at 50 million yuan ($6.83 million).
Failure to comply risked a suspension of trading accounts by the stock exchanges, which have issued the directive, two brokerage sources said.
All four sources declined to be identified as they are not authorised to speak to the media. The Shanghai and Shenzhen stock exchanges did not respond to Reuters requests for comment.
China has taken a slew of measures to stabilize its domestic stock markets, reeling from an escalating trade war with the US where President Donald Trump has imposed eye-popping duties of News Story on Chinese goods. The moves have largely shielded stocks in China from the massive selling seen on global markets.
Beijing on Friday hit back again, and increased its tariffs on US imports to 125 percent.
China’s state fund Central Huijin has vowed to increase stock holdings, a growing number of listed companies are buying back shares, and top Chinese brokerages have pledged to steady the market amid higher tariffs and global recession risks.
“Such a restriction is understandable as you don’t want to act against state will,” said one of the brokerage sources.
Brokerages have been asked to closely monitor transactions by private funds and big retail clients, according to a notice issued late on Thursday and seen by Reuters.
The current 50 million yuan daily limit on net sales by investors could be lowered further if the market slumps again, the notice said.
China and Hong Kong stocks reversed early declines on Friday and narrowed the week’s losses.
Meanwhile, China’s retail giants have launched initiatives in the past few days aimed at helping Chinese exporters pivot to the domestic market, as a US-China trade war intensifies.
Beijing increased its tariffs on US imports on Friday to 125 percent, hitting back against US President Donald Trump’s decision to hike duties on Chinese goods to 145 percent.
Chinese e-commerce giant JD.com said on Friday it will launch a 200 billion yuan ($27.35 billion) fund to help the country’s exporters to sell their products domestically over the next year.
JD.com said it would send its employees to Chinese companies involved in foreign trade, directly purchase their “high-quality products”; and set up a special area on its e-commerce platform to sell these products and direct traffic and marketing support to this area.
Separately on Friday, supermarket chain Freshippo, owned by JD.com rival Alibaba and known as Hema in Chinese, said it had opened a fast-track path for export companies to explore the domestic market.
