The Chinese securities regulator announced that it will "appropriately manage" the pace of new share sales to stabilise investors' anticipation, underscoring the regulator's desire to contain more fluctuations after market rebound, the media reported on Saturday.
The regulator's statement came on Friday after the benchmark Shanghai Composite Index suffered a 10 percent loss in a week, with market shutdowns on Monday and Thursday triggered by the circuit breaker mechanism, the China Daily reported.
On Friday, the benchmark Shanghai Composite Index surged by 1.97 percent after the securities authorities suspended the controversial circuit breaker mechanism the night before. The mechanism was blamed for worsening liquidity crunch in the market.
Deng Ge, the spokesman for the China Securities Regulatory Commission, said at the regulator will appropriately arrange the new share sales based on the principle of enhancing trading vitality and stabilising the market.
Since the Chinese market experienced unprecedented volatility in the past week, the regulator has adopted measures to calm investors' anxiety, including scrapping the circuit breaker mechanism and restricting share sales by major shareholders of listed companies to no more than 1 percent of their companies' total shares within three months.
"The circuit breaker is a magnifier, but not trigger, of market volatility. Suspension of the mechanism should decelerate the decline in A shares to reflect China's weakening fundamentals. But it will not reverse the decline," said Hong Hao, chief strategist at investment bank BOCOM International.
But a sign of relief for investors was that the yuab's decline for eight consecutive days came to a halt on Friday, highlighting the Chinese monetary authorities' determination to keep the currency stable.
