The Ministry of Finance announced that the stamp duty on the trading of shares will be raised to 0.3% from 0.1%, in an effort to clamp down the overheated stock market following an all-time high of 62% rise in the Shanghai Composite Index this month, AP reported. The hike is based on transaction turnover and will be levied on both sellers and buyers. In the 16-year history of the modern Chinese stock market, an increasein stamp duty has always caused a market slump over the following few weeks or ended a bull run. The increased stamp duty resulted after repeated warnings from regulators of stock trading risks and orders for brokerages to educate investors about the risks.
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