Chinese stock market likely to bottom out

After three weeks of plunge, the stock market is likely to stabilize with the help of a string of supportive measures, several analyst have said.

Following weeks of decline, investors' willingness to further sell has declined and the benchmark Shanghai Composite Index is expected to bottom out gradually, Xinhua-run China Securities Journal quoted Chen Jianhua, an analyst with Yintai Securities, as saying.

The Chinese stock market was among the world's best performers earlier this year, with the key Shanghai Composite Index surging more than 150 percent in 12 months, partly fueled by margin trading. The index dived 5.77 percent to finish at 3,686.92 points on Friday, due to margin traders unwinding their positions and collecting profits.

The index is near the bull or bear market threshold, and it would likely stabilize next week after the recent raft of supportive measures, echoed Fu Ziheng, a senior analyst with Wanlian Securities.

"But whether the index can register a strong rebound next week is up to the balance of the strength between buyers and sellers," Fu told the newspaper.

Twenty-eight Chinese companies having obtained permission from the securities watchdog for initial public offerings (IPOs) announced Saturday evening they would postpone follow-up issue of shares.

Separately on Saturday, China's 21 major securities brokers announced they would spend no less than 120 billion yuan (19.62 billion U.S. dollars), or 15 percent of their total net assets, on exchange traded funds (ETF) that track the performance of blue chip stocks, to arrest the market slump.

"After the market correction, shares with solid growth potential and strong profitability enjoy sunny prospects," said Chen.