Stocks dive 3.29% on largest single-day plunge since June 4
By Li Zengxin (chinadaily.com.cn)Updated: 2007-06-22 15:07
Facing the volatility in China's stock market and a series of government policies to cool down the sector, there seems to be as many individual investors wanting to stay on in the market as those determined to pull out.
According to an online poll conducted by our website, 680 of the 1,479 respondents, or 45.45 percent, said they will not continue to put money into the stock market, while 609, or 40.71 percent, said they plan to keep on investing in stocks.
But because of the central government's policies ranging from raising banks' reserve ratio and deposit and lending rates to widening the daily interbank trading band of the renminbi exchange rate against the US dollar as well as raising the stamp tax on securities trading, the Shanghai and Shenzhen exchanges have been on a roller-coaster ride since May.
Some respondents said they have decided to stop playing in the stock market as they believe the cooling down policies have set in motion a downward spiral for the composite index. Some said they will not buy stocks at this time and adopt a wait-and-see policy.
But many investors see shares as a long-term investment and prefer to keep investing in them. Many among them believe that the government's moves are just aimed at cooling things down a little and that the government is not willing - and cannot afford - to trigger a sharp market decline that will hurt all investors.
The China Securities Regulatory Commission will step up crackdown on stock irregularities including price rigging, said Shang Fulin, vice chairman of the securities watchdog yesterday.
Shang said at a seminar that price rigging activities include spreading rumors about asset injections and back-door listings to jack up share prices. "Listed companies, which have already become a main engine of economic growth, need to increase transparency in their business activities, including restructuring, mergers and acquisitions," he said.
The Shanghai Stock Exchange announced it will suspend the accounts of investors involved in irregular trading. Shang also spoke of plans for healthy market development. "We will continue to promote the establishment of new markets for different classes of companies, including a second board for small- and medium-sized companies," he said.
The securities regulator completed a series of appointments to its committees from June 18 to 20. New directors were in place for the securities brokering, investment banking, accounting, securities investment funds and securities analyst commissions. The commissions were set up in 2002 by CSRC to better discipline the securities industry and enhance communicative effectiveness between the regulator and the professional incumbents.
Several securities houses are preparing for application and product designing for the qualified domestic institutional investor (QDII) scheme, after CSRC expanded the program to enclose securities companies. According to China International Capital Corp, there are currently nine securities companies meeting the requirements to qualify for QDII status. And several of them, including CITIC Securities, Everbright Securities and Orient Securities, have started preparation processes, said sources.
Securities companies must have a net registered capital of no less than 800
million yuan and at least one year's experience in collective asset management,
according to the rule.
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