Shanghai Stocks Rally after News of Employee Stock Sharing Program
News of a potential employee stock sharing program has pushed the Shanghai Stock Exchange up on Monday. It closed at 2154.92 points, about a one percent rise.
The plan lets employees purchase shares in their companies with up to 30 percent of their wages and overall compensation. They can only purchase shares in the secondary market, and have to hold them for at least three years.
The program is designed to help increase overall stock prices by inducing confidence in the Chinese economy.
Other measures to boost the economy include the Chinese central bank announcing it would increase credit support and cross boarder use of the Yuan.
After years of record growth, China’s economy has slowed down markedly this year. The second quarter growth was 7.6%, and analysts are now wavering between a “soft” and “hard” landing.
While the growth rate for the third and fourth quarter sits at approximately 8%, some indicators suggest a less rosy outlook. There is a drop in growth of electricity consumption—which hints at decreases in overall manufacturing—and significant decreases in construction, demonstrating an ever weakening real-estate market.