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REFILE-UPDATE 1-Chinese stock regulator denies IPO reforms on meeting's agenda
September 27, 2012 / 7:51 AM / 5 years ago

REFILE-UPDATE 1-Chinese stock regulator denies IPO reforms on meeting's agenda

(Corrects day in second paragraph)

By Pete Sweeney and Hongmei Zhao

BEIJING/SHANGHAI, Sept 27 (Reuters) - 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 the market.

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 Japan.

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 September.

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; +86 21 6104 1777 / +86 158 0188 9934; Reuters Messaging:

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