(Corrects day in second paragraph)
By Pete Sweeney and Hongmei Zhao
BEIJING/SHANGHAI, Sept 27 China's securities
regulator will hold a regular meeting on Thursday, but reforming
the system for initial public offers is not on the agenda, a
regulatory source told Reuters, responding to another round of
rumours that saw stocks leap.
The Shanghai Composite Index, which hit its lowest
point since early 2009 on Wednesday, gained as much as 3 percent
and the CSI300 index rose over 3.5 percent on rumours
that the focus of the China Securities Regulatory Commission
(CSRC) meeting would be possible ways to prop up the market.
Some rumours speculated that regulators would suspend new
initial public offerings (IPOs), which many retail investors
have lobbied for in order to prevent the dilution of funds in
This is not the first time rumours about regulatory changes
have moved Chinese stock markets.
Last Thursday, for example, stock indexes slumped
dramatically for no obvious reason. A note by brokerage Shanghai
Securities, attempting to explain the dive, mentioned
speculation, subsequently verified, that China's new aircraft
carrier had been activated amid rising military tensions with
When Chinese brokerage stocks tanked abruptly on Aug 13,
some traders attributed the dive to rumours that Vice Premier
Wang Qishan would not ascend to the Standing Committee of the
Politburo, considered a setback for market reform and by
extension the securities trade.
Others said the selloff was caused by speculation that Guo
Shuqing, the country's chief securities regulator and a rising
star of the financial reform movement, would be reassigned.
Chen Shaodan, analyst at New Times Securities in Shenzhen,
said that investors have reacted directly to news about the
political fortunes of the top market regulators.
"But the reactions are usually very short term," she said.
But Chinese markets showed no particular reaction to the
disappearance of Vice President Xi Jinping, for example, who
vanished from public view for nearly two weeks in early
Traders said investors didn't buy into the more extreme
stories - that Xi had been the target of an assassination
attempts, for example, or that he had sequestered himself to
prepare for war - and because the health of Chinese leaders has
always been treated as a state secret.
(Additional reporting by Chen Yixin; Editing by Kim Coghill)
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