By Weiyi Lim
Tuesday, January 22, 2013
China's securities regulator said intervention in the nation's stock
market is necessary at "key moments" because it isn't mature, the
official Xinhua News Agency reported.
"Volatility is high, and don't forget, China is still a
developing country," Xinhua quoted China Securities Regulatory
Commission Chairman Guo Shuqing
as saying at a national securities and futures supervision meeting.
Net share purchases by China's social security fund were 42.8 billion yuan ($6.9 billion) last year and totaled 42.7 billion yuan by qualified foreign institutional investors, Xinhua
cited Guo as saying. They were the biggest net
purchasers, Xinhua reported.
Shanghai Composite Index (SHCOMP) erased a 1.2 percent loss and rose 0.3
percent after Guo's comments. The gauge resumed its decline in the afternoon
to end the day 0.6 percent lower at 2,315.14 after Xinhua said in an unsigned
commentary after Guo's remarks that intervention
may have a negative impact. The immaturity of a market shouldn't become an
"excuse" for regulators to step in, Xinhua said in the commentary,
which was posted on its Weibo microblog
The Shanghai Composite's 10-day volatility rose
to 23.3 today, the highest level since Dec. 26, data compiled by Bloomberg
show. The index has rebounded 18 percent since reaching an almost four-year
low on Dec. 3 on optimism that Chinese economic growth will recover.
Guo said foreign institutional
investors have stabilized China's stock market, Sina.com reported on Jan. 16.
The official was cited by the Shanghai Securities News the same day as saying
China would push forward capital market reforms and deepen reform of initial
Regulators have accelerated approvals for overseas firms to buy
securities from Chinese markets. The State Administration of Foreign Exchange
awarded $15.8 billion of quotas for qualified foreign institutional investors
to trade stocks and bonds in 2012, according to regulatory data compiled by
Bloomberg. That's more than
the previous five years combined.
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