COLUMN-China's CSRC: market regulator, or market meddler?

(Wei Gu is a Reuters columnist. The opinions expressed are her own)

By Wei Gu

HONG KONG, March 5 (Reuters) - Who ended the peaceful rise of China's stock market, once considered a safe place for investors to double their money every year?

Many blame life insurer Ping An Insurance (601318.SS: Quote, Profile, Research, Stock Buzz) (2318.HK: Quote, Profile, Research, Stock Buzz), whose Chinese name means, ironically, peace and safety.

To be fair, Chinese stocks had fallen hard as a result of some bigger problems, but Ping An stands accused of pouring salt into the market's wounds in January by announcing plans for a massive $17 billion share offering.

Ping An's shares sank, pulling the Chinese stock market down with them to a one-year low amid concern that the market could not absorb the new capital.

Officials at the China Securities Regulatory Commission (CSRC), seeking to revive the sagging index, declared that companies should "on no account maliciously seize money from the market", vowing to "strictly" examine fund-raising applications.

But is Ping An really at fault? Its capital-raising is ill-timed from the regulator's perspective, but any listed company's goal is to maximise shareholder value. If Ping An just wants to take advantage of its lofty valuation and raise some cheap money, what's wrong with that?

Regulators shouldn't fine-tune every twist and turn in the market. Instead, they should let investors send buy and sell signals to companies as they see fit. Meddling by regulators can shift the balance of the market, add uncertainty and possibly even hurt shareholders' interests.