Beijing weighs curbs on stock speculation

Regulators look to lessons of 2015 crash

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China's financial regulators are considering a number of cooling measures for the stock market as they grow concerned about the speed of a $1.2 trillion rally since the start of August, people familiar with the matter said.

The measures proposed to top policymakers in recent weeks include the removal of some short selling curbs, the people said, asking not to be identified as the information is private. Authorities are also contemplating options to rein in speculative trading on concern a sharp reversal might inflict heavy losses on retail investors.

With an epic boom and bust from 2015 not forgotten, officials are seeking to cultivate steadier gains that will help revive the economy and consumer sentiment. The deliberations also coincided with China's push to show off its military might at Wednesday's parade to commemorate the 80th anniversary of the end of World War II. The government often seeks to instill stability in its capital markets around major national events.

China Securities Regulatory Commission Chairman Wu Qing signalled determination to ensure stock market stability at a symposium he convened in Beijing at the end of last month, pledging to consolidate the “positive momentum” of the market, while promoting “long-term, value, and rational investing.”

It’s unclear if any of the measures will be approved or adopted, said the people. The CSRC didn't immediately reply to a faxed request for a comment.

SIGNS OF FROTH

China's stock market has staged a comeback since April, with major indexes gaining more than 20%. The Shanghai Composite Index hit a decade-high and the CSI 300 Index has surged more than 20% from this year's low.