China's securities regulator says rally start of long bull run
By Bridge News
Shanghai--June 22--China said Tuesday the head of its securities watchdog
body, Zhou Zhengqing, predicts the rally which has buoyed China's stock markets
over the past five weeks is the beginning of a longer bull-run.
The official Shanghai Securities News was quoting the head of the China
Securities Regulatory Commission's comments to a symposium discussion of a
pro-market editorial carried in the People's Daily, the communist party
mouthpiece.
The editorial is part of government drive to talk up China's markets, and
was taken as a signal that the government will continue to push through market
boosting measures such as the cut in stamp tax, which sparked the rally.
Zhou reiterated the editorial's points at the meeting, saying that the
recent rally was not a temporary phenomenon, but marked an important turning
point in the development of China's stock markets.
The stock markets were experiencing a healthy recovery underpinned by strong
economic fundamentals, he said.
Shanghai B-shares have gained more than 65 percent and Shenzhen B-shares
surged more than 110 percent, while both A-share markets rose more than 40
percent since May 19 on the back of a June 1 stamp tax cut on B-shares, and deep
cuts in yuan deposit rates on June 10.
A-shares are reserved for domestic investors, while B-shares are for foreign
investors.
Zhou also claimed stock markets are gaining foundations for long-term stable
development, which will be crucial to the reform of China's state-owned
enterprises, the paper said.
But whether the recovery is real is sparking a heated debate in the pages of
the official press.
In a People's Daily editorial on Monday economist Dong Fureng argued China's
markets were long on speculation, short on investment, saying too much money is
pouring into poorly managed companies in search of the fast buck.
The market-friendly editorial of the People's Daily, released on June 15,
attributed the market rally to a natural healthy recovery and encouraged
investors to remain confident about the markets.
However, Zhou did caution managers of major securities brokers to
standardize their daily operations, not to misappropriate clients' funds and not
to allow clients to trade on credit.
The warnings fall in line with the government's determination not to allow
trading irregularities to worm their way into the markets on the back of bullish
euphoria.
An editorial in last week's Shenzhen Securities Times quoted market
regulators as saying, "We have to continue to raise our regulatory standards,
protect investor rights and guarantee the healthy development of the markets."
End
By Bridge News
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rewrites.
(Note) - I have not taken a position yet!
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