A top official from China's securities regulatory commission said Tuesday it is important to intervene at key moments in the stock market, which is still undeveloped, and it is good to see that some low-income investors who can't bear the financial risks are moving away from the market.
"The regulator should regulate China's stock market, or the market will be in disorder," China Securities Regulatory Commission (CSRC) Chairman Guo Shuqing, speaking at a national securities and futures regulatory meeting, was quoted as saying by Xinhua News Agency on Tuesday.
"China is still a developing country, and the Chinese stock market is undeveloped with a performance that usually fluctuates," Guo said. "We suggest that low-income investors choose other investment products with lower financial risks."
Among the measures taken by the CSRC, the regulator suspended approval of new IPOs in the second half of last year and are now proceeding slowly with new listing approvals in an effort to revive the sagging stock market. An oversupply of new stocks in a sluggish market was believed to be one cause of the poor performance. Currently over 800 enterprises are in line for the regulator's review and approval procedures.
"Chairman Guo's speech at the meeting discussed measures that will protect low-income investors' interests. The administrative intervention Guo described is necessary under China's financing and investment environment," Li Daxiao, a director of research with Yingda Securities, told the Global Times Tuesday.
Around 89 percent of China's stock investors lost money last year, with most of them complaining that the worst thing they did was investing in the stock market, according to a November survey of 62,000 individual investors across the country conducted by news portal sina.com.
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