The Shanghai Stock Exchange is looking into widening the daily price band for blue chip companies, according to China Securities News, the exchange's official publication.

The newspaper said the exchange was also hoping to allow investors to buy and sell shares on the same day in a bid to boost trading and liquidity.

In addition, the exchange is drafting new rules on the introduction of margin trading, the buying and selling of stocks with borrowed funds provided by stock brokers.

While analysts expect margin trading to be introduced in the second half of this year, there is not yet any indication of a timetable for the other two market proposals.

However, analysts said the introduction of measures to increase market liquidity is just a matter of time given the near-completion of share reforms.

These involved converting non-tradable State-held shares into regularly traded equity and the lifting of a year-long ban on initial public offerings.

The exchange has proposed widening the daily price band the daily price limits within which the price of a security is allowed to rise or fall  for the SSE 50 Index from the current 10 per cent to 20 per cent.

The change would be applied to the bourse's top 50 firms, whose management is more transparent and whose stock prices are more stable.

"Widening the price band to 20 per cent would reduce the number of times the price limit is reached by over 90 per cent," Liu Ti, of the exchange, was quoted as saying in China Securities News.

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