Some China regulators concerned on quake plan: report
SHANGHAI (Reuters) - Some officials at China's securities regulator are concerned that a plan for fast-track approval of financing and new share issues by firms hit by last month's earthquake may undermine an already weak stock market, the South China Morning Post reported on Saturday.
China Securities Regulatory Commission Chairman Shang Fulin said in comments posted on the watchdog's website on Thursday that the regulator must actively support reconstruction efforts at quake-hit firms and, under appropriate conditions, give fast-track approval to corporate financing and listed firms' follow-on capital-raising applications.
"Senior officials are now confused," the South China Morning Post quoted a CSRC division chief as saying.
The source, who did not wish to be named, indicated that the regulator had lost its grip on the volatile market, the paper said.
It added that the securities regulator had ordered mutual funds not to sell shares twice in the past three weeks. Since last month's devastating earthquake in southwest China, where the death toll is approaching 70,000, market rumors and media reports have repeatedly indicated that regulators were trying to stabilize the market via contacts with fund managers.
China's benchmark Shanghai Composite Index has eased about 8 percent since the May 12 earthquake, closing lower for a fourth day in a row on Friday at 3,329.670 points, although it remains above a 13-month low near 3,000 points hit in mid-April.
The newspaper quoted the CSRC source as saying it was considered politically correct to loosen controls on share sales by quake-hit firms but market watchers believed speeding up listings may actually spark a further slide in the market. Shang, who made the comments during a visit to Sichuan province, the worst-hit area, made specific reference to Dongfang Electric Corp, China's biggest maker of power generating equipment.
More than 500 people at Dongfang's main manufacturing site in Sichuan province were killed by the quake.
The company, whose shares have fallen nearly one-fourth since the quake to 32.24 yuan, has received an injection of 500 million yuan ($72.22 million) from the government and its steam turbine unit has taken in more than 10 billion yuan in orders since the disaster, according to reports in the official media.
The CSRC efforts to support post-quake reconstruction are also expected to extend to companies that would be involved in the rebuilding effort.
On Thursday, the regulator approved an initial public offering by China State Construction Engineering Corp Ltd, the country's biggest home builder, that could raise more than $6 billion in China's largest IPO this year.
Analysts said the authorities' action on the IPO, despite weakness in the stock market, may reflect their drive to get state enterprises moving quickly on the post-quake reconstruction effort.
Worries about the flood of new equity from that IPO, however, were cited as one of the factors in Friday's stock market slide.
($1=6.923 Yuan)
(Reporting by Edmund Klamann; Editing by Ben Tan)
