According to a note from the Deutsche Bank today, the China Securities Regulatory Commission’s move new policy measure to stem the flow of newly freed-up shares into the secondary A-share market is unlikely to have much impact on a market that has already lost 50% of its value over the last six months.

The first change to guidelines on the sale of equities released today requires shareholders to use the bloc trading system instead of the bid trading system to sell freed-up shares amounting to more than 1% of the total shares of a listed company. The second prevents them selling freed-up shares within 30 days of the release of annual or semi-annual reports.

“Such measures will ease the pressure on the A-share market by stemming the flow of newly freed-up shares in secondary market,” the bank said. “However, in our view, the new policy move is not strong enough to shore up market sentiments. Concerns about a weak external environment, tightening domestic policies, high inflation, and slowing corporate profit growth are weighing in on investor confidence.”

The bank added that a reduction of the stamp tax rate or other policy measures looks possible if the market continues to fall.

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