China’s top securities watchdog vowed on Feb 10 to “capture big crocodiles” in the country’s stock market, suggesting that a tougher regulatory stance against stock speculation and manipulation will be a priority for the regulator.
In a highly anticipated speech at the regulator’s annual work meeting, Liu Shiyu, chairman of the China Securities Regulatory Commission, implied that the “big crocodiles” were tycoons who wield capital power to manipulate stock prices and disrupt fair market play.
“No one will be allowed to create winds and waves in the stock market. The big crocodiles will not be allowed to suck the blood of small investors,” Liu was quoted by Chinese media outlets Caixin and Sina.com as saying.
Liu’s remarks were seen as the latest evidence of China’s increased supervision of illegal market activities.
“I think Liu has been frank with his opinion. Increased supervision and regulation have begun and will be one of the themes for 2017,” said Hong Hao, chief strategist at BOCOM International in Hong Kong.
The CSRC chief has been known for his outspoken attitude and harsh criticism of the Chinese stock market. He recently condemned the aggressive buyouts of listed companies by those using speculative capital, whom he described as “evil monsters” and “barbarians” in the market.
Liu was appointed the country’s securities chief in February last year after the stock market suffered a turbulent ride that wiped out massive market value.
At the meeting on Feb 10, Liu also said that the regulator’s review and approval of initial public offerings by companies is not contradictory to the goal of introducing a registration-based IPO mechanism, which he said remains the “direction” of the capital market reform.
Wang Jianhui, director of the research center at Capital Securities, said that Liu’s comments underscored the regulator’s effort to strike a balance between allowing the market to have a greater say and weeding out poor quality companies through the administrative approval process.
Deng Ge, a CSRC spokesman, said on Feb 10 that the regulator will maintain a normal pace for the IPO approval and will actively increase new share supplies in the market while forbidding companies from using the proceeds for speculative purposes.