China's securities watchdog told the press on Sunday that volatility in the Shanghai and Shenzhen bourses has been further checked, and investors’ confidence has been boosted.
“CSRC has regulated according to the law,” Liu Shiyu, chairman of the China Securities Regulatory Commission (CSRC), said. He added that the IPO standard of companies is strict, ensuring the quality of listed companies.
Liu Shiyu walks into press conference on February 26, 2017. /CGTN Photo
Liu said the watchdog will resolutely investigate and act when chaotic phenomena appears in capital markets. “Clues that deserve investigation will be closely investigated,” he stressed.
The chairman used colorful language to describe the mainland markets as like a "pearl necklace" - a good pearl equals a good listed company, while the string means the direction of the reform. “The pearl needs to be nursed, which means regulatory measures of capital markets need to be strengthened,” said Liu.
“How many companies have been listed do not matter, what matters is the quality of the companies,” said Liu, commenting on China’s IPO process in 2017.
CSRC takes questions from reporters at at SCIO, February 26, 2017. /SCIO Photo
When asked by foreign journalists about China’s entrance into the MSCI, the US-based market index provider, Vice Chairman of the CSRC Fang Xinghai said that without mainland markets, MSCI is incomplete.
Fang said that there are still technological obstacles regarding different accounting standards for foreign enterprises listed on the mainland markets, and the watchdog has been studying the opportunities and further consideration is needed.
According to Liu, there were 248 IPOs in 2016, raising more than 1.34 trillion yuan (190 billion US dollars). He said innovative, technological companies are all backed in China’s capital markets.
The CSRC has invested efforts in building a multi-tiered equity market by further deepening reform of the NEEQ, also known as the New Third Board, expanding markets by including private equity institutions and launching a preferred stock pilot program. More than 10,000 companies were quoted on the NEEQ with 2,940 private offering deals in 2016.
CGTN's Grace Shao questions during the SCIO press conference. /SCIO Photo
Zhao Zhengping, vice chairman of the CSRC said that the focus of NEEQ’s reform is to continue building multi-tiered equity markets, making financing and trading as core function as improvements.
He said the 10,715 listed companies have improved financing structures, and improved value of brands, and especially driven investment toward start-ups. “NEEQ in the future has great potential to support innovative and growing small-and-medium-sized enterprises.”
Liu Shiyu said regulators would crack down on "crocodiles" who are unfairly profit from the stock market. /CFP Photo
When asked if the CSRC sees US stock markets as competition for companies considering an IPO, the CRSC Chairman Liu Shiyu responded: "Chinese stock markets are only in partnership with Western stock markets, it's not a competition with anyone."
Responding to Shenzhen tycoon Yao Zhenhua’s barring from the insurance industry for his hostile attempted takeover of property developer Vanke, Liu said that China’s securities watchdog will cooperate with the insurance watchdog, providing a better development for China’s capital markets environment.
As well as the "pearl necklace" expression from Sunday’s press conference, Liu added "barbarians," "evil monsters" and "poisonous demons" to the regulatory lexicon, to describe improper practices in corporal mergers and acquisitions. He has also referred to financiers who profit unfairly from the stock market as "crocodiles."
(Additional reporting by CGTN’s Grace Shao)