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Economy

Blue chips take loss as CSRC hints IPO approvals may come at faster pace

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2017-02-28 09:49Global Times/Agencies Editor: Li Yan ECNS App Download

Chinese mainland blue chips posted their biggest single-day loss in two months on Monday after China's securities regulator vowed to step up its campaign against speculation and hinted that it would loosen its grip on new share offerings.

The blue-chip CSI 300 index fell 0.80 percent to 3,446.22 points, its sharpest drop since December 23, 2016.

The benchmark Shanghai Composite Index also weakened 0.76 percent to 3,228.66 points, while the Shenzhen Component Index declined 0.86 percent to 10,353.55 points.

Liu Shiyu, chairman of the China Securities Regulatory Commission (CSRC), told a news conference on Sunday that the country will focus on stable development of its capital markets in 2017.

But limiting or halting initial share sales to stabilize the secondary market doesn't "solve the problems of long-term healthy development of capital markets," Liu added, stirring worries of increasing equity supply this year.

The remarks followed a regulator's move over the weekend to punish the insurance unit of financial conglomerate -Baoneng Group for speculative trading, and a 3.48 billion yuan ($506.96 million) penalty on investor Xian Yan for market misbehaviour.

"This shows that regulators are taking a tough stance against speculative trading," wrote Li Lifeng, analyst at Sinolink Securities. "This will purify China's share market, but will have a negative impact on stocks with excessive valuations."

Baoneng Group's listed units, including Nanning Department Store and Jonjee Hi-tech Industrial and Commercial Holding tanked in response to the regulator's moves.

Main sectors fell across the board, led by transport shares.

Baowu Iron & Steel, previously known as Baoshan Iron & Steel, shot up 7.4 percent following a one-month trading halt after its acquisition of smaller debt-laden rival Wuhan Iron and Steel.

  

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