Chinese authorities are planning to cut the stamp duty on domestic stock trading by as much as 50% in an effort to revive the struggling stock market and boost investor confidence.
Hong Kong Chief Executive John Lee has established a task force to study the possibility of reducing stamp duty on stocks in order to strengthen the local economy, as the move comes after China halved its stock stamp duty in an effort to boost investor confidence.
China's stamp duty and margin cuts revive confidence in the Hong Kong stock market, leading to a rally in stocks such as HKEX, Alibaba, and BYD, while China Evergrande continues to struggle.
China has announced measures to support the market, including reducing stamp duty on stock trading and approving the launch of retail funds, but the response from investors has been muted.
Hong Kong brokers and analysts are calling for a reduction in stamp duty and relaxed listing rules to revive the sluggish stock market, following a decline in turnover after the government increased the stamp duty in August 2021; they suggest that these measures would attract more investors and new listings.
Financial Secretary Paul Chan Mo-po has cautioned against lowering Hong Kong's stamp duty on securities trading as a means to revive the sluggish stock market, stating that it may not resolve the underlying structural issues but could weaken investor confidence; he also plans to visit the US and Europe to promote Hong Kong as an international financial center.
Hong Kong's financial task force will hold additional meetings to review the stock market liquidity and provide recommendations to boost turnover and fundraising activities.
