Recently, A-shares have been frequently searched, and market fluctuations have attracted widespread attention. The executive meeting of the State Council held on January 22 listened to a report on the operation of the capital market and work considerations. The meeting emphasized that it is necessary to further improve the basic system of the capital market, pay more attention to the dynamic balance of investment and financing, vigorously improve the quality and investment value of listed companies, increase the intensity of medium and long-term capital entry into the market, and enhance the internal stability of the market. It is necessary to strengthen the supervision of the capital market, zero tolerance for violations of laws and regulations, and create a standardized and transparent market environment. It is necessary to take more effective measures to stabilize the market and confidence. It is necessary to enhance the consistency of macroeconomic policy orientation, strengthen the innovation and coordination of policy tools, consolidate and enhance the positive trend of economic recovery, and promote the steady and healthy development of the capital market.
People in the industry generally believe that the meeting listened to the report on the operation of the capital market and work considerations, and studied and deployed related work, in the short term, at the time of the adjustment of A-shares, it is of great significance to boost market confidence, and in the long run, it is conducive to promoting the reform of the capital market at a higher level.
People pass through the China Securities Regulatory Commission. The picture shows the data map. (PHOTO COURTESY OF CNSPHOTO)
Stabilize the market and confidence
Affected by factors such as the central banks of Europe and the United States coincidentally suppressing the expectation of interest rate cuts, the global majority equity market has fluctuated, and A-shares have recently retreated again.
The National Standing Committee pointed out that it is necessary to take more effective measures to stabilize the market and confidence, and promote the steady and healthy development of the capital market.
This is the second time in nearly six months that the National Standing Committee has mentioned the capital market. On July 31, 2023, the executive meeting of the State Council emphasized the need to activate the capital market and boost investor confidence. At that time, specific measures were also introduced, such as halving the stamp duty, the strictest "new rules for reducing shareholdings" in history, and the phased tightening of the IPO (initial public offering) rhythm. Up to now, the A-share market has set off multiple rounds of buybacks and holdings.
"Standing at the current point in time, it is realistic and necessary to further emphasize the supportive measures for the capital market. Recently, the A-share market has been in a large fluctuation, the market trend and the mainland economic fundamentals have deviated, which does not fully reflect the growth trend of the mainland economy, investor confidence has been greatly affected, and the stock index has been under great pressure. At this critical moment, the meeting emphasized that it is of great significance to stabilize the market and confidence through various measures. Zhao Xijun, co-dean of the China Capital Market Research Institute of Chinese University, said.
Maintain a dynamic balance of investment and financing
The National Standing Committee made it clear that it is necessary to further improve the basic system of the capital market, pay more attention to the dynamic balance of investment and financing, vigorously improve the quality and investment value of listed companies, increase the entry of medium and long-term funds into the market, and enhance the internal stability of the market.
Previously, on January 12, Yan Bojin, director of the issuance department of the China Securities Regulatory Commission, said at a press conference of the China Securities Regulatory Commission that the current IPO rhythm has slowed down significantly. In the next step, the CSRC will scientifically and reasonably maintain the normalization of IPOs. We will continue to do a good job in counter-cyclical adjustment, do a good job in the coordinated development of the primary and secondary markets, strictly control the entrance to IPOs, and improve the quality of listed companies.
It is understood that due to the phased tightening of IPOs and the implementation of new refinancing regulations in 2023, the performance of the equity financing market is weak.
Wind data statistics show that as of December 27, 2023, the scale of equity financing was 1.12 trillion yuan, down 32.98% year-on-year, of which the IPO financing amount was 355.257 billion yuan, down 38.52% year-on-year, and the additional issuance amount was 569.309 billion yuan, down 20.44% year-on-year.
"The current slowdown in the pace of IPOs may be affected by a variety of factors, such as economic cycles, market fluctuations, regulatory policy changes and other factors may have an impact on the timing of a company's choice to go public. The China Securities Regulatory Commission (CSRC) has responded positively, stating that it will scientifically and reasonably maintain the normalization of IPOs. This statement demonstrates the SFC's focus on market developments and underlines its commitment to market stability. Financial commentator Zhang Xuefeng told a reporter from China Business Daily.
Yuan Shuai, deputy secretary-general of Zhongguancun Internet of Things Industry Alliance and executive director of the high-quality development promotion project of specialized and special new enterprises, said in an interview with reporters that for enterprises, the normalization of IPOs will give more enterprises the opportunity to expand their business scale and enhance their competitiveness through listing and financing. Through IPO financing, companies can attract more investors, expand the scale of capital, and further promote the development and growth of enterprises. The CSRC's strict control of the IPO entry gate will prompt enterprises to improve their own governance level and strengthen internal control and risk management to meet the listing conditions. In addition, the China Securities Regulatory Commission (CSRC) has put forward strict regulatory requirements for listed companies, which will prompt enterprises to improve their transparency and standardize their operations, and enhance investor confidence.
For the next major work, Lin Xiaozheng, deputy director of the Securities and Fund Institutions Supervision Department of the China Securities Regulatory Commission, also said a few days ago that based on the new stage of promoting the reform of the registration system, how to build a benign mechanism for the common development of long-term funds, capital markets and the real economy needs to further deepen the reform and coordinate the design of the top-level system. At present, the China Securities Regulatory Commission is comprehensively benchmarking the spirit of the Central Financial Work Conference, studying and formulating an action plan for the reform of the investment side of the capital market, as an action plan for comprehensively solving the problems of insufficient supply of medium and long-term funds in the capital market in the coming period.
"Zero tolerance" for violations of laws and regulations
The National Standing Committee stressed that it is necessary to strengthen the supervision of the capital market, "zero tolerance" for violations of laws and regulations, and create a standardized and transparent market environment.
In this regard, the China Securities Regulatory Commission has previously made a comprehensive deployment: it is necessary to adhere to the main responsibility and main business of supervision, comprehensively strengthen supervision, and effectively implement the "long teeth and thorns" of supervision.
In terms of implementing the principle of "zero tolerance", 2023 has achieved a lot of results. Teng Biyan, director of the Office of the Punishment Committee of the China Securities Regulatory Commission, said a few days ago that in 2023, more than 350 cases will be concluded in the whole system, more than 1,000 responsible entities (families) will be punished, and the amount of fines and confiscations will be more than 60 billion yuan. In particular, some cases of financial fraud that have a bad impact on the market and have a high degree of social concern have been severely punished in accordance with the law, and the market environment has been vigorously rectified and purified.
Cheng Hehong, head of the Rule of Law Department of the China Securities Regulatory Commission, stressed that the rule of law is the cornerstone of the capital market. At present, fruitful results have been achieved in the construction of the rule of law in the capital market, including improving the legal system of the capital market, establishing and improving the system and mechanism for strictly cracking down on securities violations and crimes, strengthening three-dimensional accountability, severely punishing the "first evil", and taking multiple measures to vigorously protect the legitimate rights and interests of investors.
"In the next step, the China Securities Regulatory Commission will continue to maintain the main tone of 'strict' administrative law enforcement, adhere to 'zero tolerance', anchor 'high quality', and grasp the constituent elements of securities violations stipulated by law in the trial of administrative punishment cases, and strictly pursue the legal responsibility for illegal acts. Teng Biyan said that the financial fraud, fraudulent issuance, intermediary dereliction of duty and absence and other illegal acts will be closely followed, severely punished, and deterred to help fight counterfeiting and prevent counterfeiting; strict regulation and precise law enforcement of market manipulation, insider trading and other behaviors to help maintain the order of fair trade; actively support criminal justice and civil compensation, and build a three-dimensional accountability system of "long teeth and thorns" to escort the high-quality development of the capital market.
To maintain the steady and healthy development of the capital market, we cannot "fight alone", but need to make concerted efforts. Zhao Xijun believes that the healthy development and steady development of the capital market cannot be achieved by the efforts of the China Securities Regulatory Commission alone, especially in the work areas involving multiple departments, such as guiding medium and long-term funds to enter the market and three-dimensional accountability for securities violations and crimes, which require multi-party coordination and joint efforts. The meeting made relevant work arrangements, and it is expected that a number of ministries and commissions will work together to promote the reform of the capital market. (Reporter Wang Tongxu)
Source: China Business Daily