China allows short selling and margin purchases

Sept. 26 (Bloomberg) — China’s cabinet agreed to let investors buy shares on credit and sell borrowed stock to help develop Asia’s second-largest market after prices and trading volumes slumped, an official familiar with the plan said.

China’s government is betting the changes will boost trading without spurring further declines after state share buybacks helped the CSI 300 Index rebound from a two-year low.

China has scrapped the tax on stock purchases and relaxed company buyback rules to help support the world’s second-worst performing stock market this year.

The CSI 300 rose 0.9 percent today and added 8.2 percent this week, the first weekly gain in nine weeks.