Boost for investor confidence market’s most valuable asset
The securities regulator said it has worked together with the Ministry of Public Security to investigate a number of suspected cases of market manipulation and malicious short selling and will intensify the supervision of trading behaviors. For investors concerned about securities lending, the China Securities Regulatory Commission said it has suspended new securities lending and strengthened supervision of the business.
All measures are to strengthen market entry expectations and crack down on malicious short selling. In response to these moves, China’s stock market has reacted positively, with three major indexes of the A-share market skyrocketing on the close of trading on Tuesday.
In the face of the continued shocks in the country’s capital market in recent days, what the authorities should do first is calm market sentiment and inject more liquidity to restore market confidence. After solving short-term urgent problems, the key to increase investor confidence is repairing long-term market expectations.
The capital market is the barometer of the economy. The business environment in which listed companies as representatives of the best assets in China operate is the key to determining the extent of market confidence and expectations. Therefore, all financial work must focus on how to solidify the real economy, and improve the quality of listed companies and their investment value.
To fully protect the fair order of the securities market, regulators should face up to the serious problems such as listed companies putting greater emphasis on financing but less emphasis on investment and the protection of the rights and interests of small and medium-sized investors. Given that China’s
A-share market has 220 million investors, and its volatility is closely related to the interests of ordinary people, the country must build an “investor-based” capital market. It should further improve the quality evaluation standards of listed companies and highlight the return requirements, support listed companies to inject quality assets, and put in place an exit mechanism for companies with major violations of the law or no investment value. Companies involved in windowdressing of financial reports, fraudulent listing, insider trading, market manipulation or other illegal issues, must be severely dealt with.
The authorities should make every effort to create an open, fair and just market order and a legal environment in which investors can truly feel the fairness and justice of the market and have their legitimate interests strictly protected.