(Yicai Global) Oct. 19 -- China's main stock market indexes rebounded from around four-year lows today, after three of the country's top financial figureheads made a rare joint public address to rally investor confidence.
The Shanghai Composite Index closed up 2.58 percent after sinking to a 47-month low yesterday, while the Shenzhen Component Index bounced up 2.79 percent from a 53-month nadir. The ChiNext index, which tracks Shenzhen's board for fast-growing small enterprises, jumped 3.72 percent after closing at a five-year low.
Earlier today, executives from the People's Bank of China, the China Banking and Insurance Regulatory Committee and the China Banking Regulatory Committee joined forces to reassure investors that the stock market's on-going decline was merely down to investor sentiment, and was not a resemblance of its stable economy and financial markets.
Systematic risks are completely under control, Guo Shuqing, president of the banking and insurance watchdog, said in an interview posted on the regulator's website. His words were echoed by CSRC Chairman Liu Shiyu and PBOC head Yi Gang, who made comments via separate media channels.
Liu He, vice premier of the State Council, China's cabinet, also weighed in.
Many factors have caused obvious stock fluctuations and declines in China recently, he told state-owned newspaper the People's Daily. There are external factors, such as global stock wobbles caused by interest rate hikes at major economies' central banks, and the China-United States trade frictions, and China's own economic reform has affected the markets, he said, adding that future economic uncertainties have influenced investor behavior.
Liu believes that China is becoming the most investment-worthy market from a global asset allocation perspective. It has reduced its economic bubble, its listed companies are improving, and valuations are at historically low levels, he said, implying that many institutions are paying attention to the Chinese stock market due to its high investment value.
Editor: James Boynton