Stocks regulator calls for confidence in 2012
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Xinhua, December 31, 2011
China's top securities regulator, Guo Shuqing, delivered a message of confidence for equity markets in 2012, in an attempt to soothe frustrated investors who booked sharp losses in 2011, the China Securities Journal reported Saturday.
"We're confident because we have a number of strong enterprises in the real economy," said Guo, chairman of the China Securities Regulatory Commission (CSRC), at a financial award ceremony in Beijing Friday night, according to the newspaper.
Guo said his confidence stems from the country's equity markets that are the world's second largest by market value and in lockstep with its gross domestic product, as well as a bond market that is the world's fifth-largest.
Guo's remarks came after Chinese equity markets closed on the final trading of the year on Friday, sealing a 21.68-percent decline of the benchmark Shanghai Composite Index in 2011.
Each investor booked an average loss of about 40,000 yuan (6,318 U.S. dollars) in equity markets both in Shanghai and Shenzhen, with a total of 6 trillion yuan in market value evaporating.
Chinese enterprises raised a record high of 824.89 billion yuan in initial public offerings, rights issues or floating new shares, a figure that many investors believed weighed down the indexes and led to their losses.
"A market that functioned only as a fund-raising platform failed investors in 2011," said Li Xunlei, former chief economist of Guotai Junan Securities, one of China's largest brokerage firms.
"Policies that eye only quick returns won't help bring a bullish market; the stock market outlook of 2012 depends on the country's economic restructuring and a more transparent mechanism to regulate the markets," he said.
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