Stocks News
- CSRC to crack down on market foul play
Date: 14-May-2007 Sources: (Shenzhen Daily)
securities regulator said Saturday it would step up efforts to clamp down on growing insider trading and stock price manipulation as the country's surging A share market lures a large number of retail investors.
In a statement carried on the front pages of all domestic major securities newspapers, the China Securities Regulatory Commission (CSRC) said it would 'strengthen supervision?of stock holdings and transactions by board members and senior managers of listed firms.
It also said it would increase supervision over asset restructuring by listed companies, many of whose shares have gone through the roof in recent months, partly on speculation that the companies may become the targets of backdoor listings.
'It is worth noting that market irregularities have increased as a large number of investors lacking an awareness of the risks associated with stock trading are entering the market,'the statement said.
The main stock index rose above 4,000 points for the first time last week, despite growing concern among institutions that the market had climbed dangerously high.
The index has gained about 50 percent since the start of 2007 and many traders and analysts think an extended climb above 4,000 could prompt authorities to act to cool the market. Central bank governor Zhou Xiaochuan said earlier this month that he was concerned about a stock bubble.
A crash could harm social stability in China and unsettle markets around the world, analysts say.
More than 10 percent of China's 90 million-plus stock accounts were opened this year, compared with just 5.2 million opened in all of 2006.
The Shanghai Securities News reported Saturday that in the first four months of this year alone, 70 billion yuan (US$9.1 billion) worth of bank savings in Shanghai had flown into the stock markets.
In the statement, the CSRC ordered brokerages and fund management firms to pay for efforts to educate investors on investment risks.
It also urged listed companies to release accurate and timely information and vowed to punish investors found of collaborating with executives of listed companies to gain from insider trading.
In a high-profile case, the CSRC plans to punish Shanghai-listed Zhejiang Hangxiao Steel Structure Co. for illicit information disclosure related to a big overseas contract, which has sent the company's shares soaring, domestic media have said.
On Thursday, the Shanghai bourse suspended trading in the shares of Kweichow Moutai Co., a top liquor maker, following local media reports that the company's general manager, Qiao Hong, has been placed under official investigation, Xinhua said.
Qiao was reportedly summoned by the Communist Party's Guizhou Provincial Commission for Discipline Inspection on April 30, Xinhua said, quoting the Beijing Times.
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