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Stock market falls as buffer fund rumors quashed
By Bi Xiaoning (China Daily)
Updated: 2008-11-24 17:48 China has no plan to launch buffer funds in the short term, say the country's security regulators in response to market rumors. "We haven't had any instruction to launch buffer funds yet, and the total amount is still unclear," an anonymous official with China Securities Regulatory Commission (CSRC) told China Daily. Rumors have been circulating since last Friday that the long-awaited buffer funds will be involved in the stock market. It's said that the total amount of buffer funds would be about 300 billion yuan, which would be mainly invested in blue-chips on the Shanghai and Shenzhen 300 index. But so far local governments haven't reached any consensus on establishing buffer funds, so the rumor is likely to have come from speculators. By the end of this year, a lowered RRR (reserve requirement ratio) and interest rate can be expected as favorable policies for the stock market, but buffer funds won't come soon, industry analysts said. Due to the denial, the benchmark Shanghai Composite index fell 3.67 percent to 1,897.06 points today. (For more biz stories, please visit Industries)
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