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In line with the requirements specified in the “Guidance on Further Deepening the IPO System Reform” by the China Securities Regulatory Commission, the Shenzhen Stock Exchange continues to explore and argue for the measures for prevention from speculation on newly issued shares, further intensifying its efforts to curb market speculation. Meanwhile, the SZSE also calls for fine customer management from all member units, and urges securities intermediaries to play a more important role in respect of the restraint of speculative investments in newly issued shares and investor education.
Since March, the SZSE has enhanced its supervisory strength over accounts for speculative investments in newly issued shares, and measures have been taken for certain accounts frequently participating in such speculative investments, including reporting to the CSRC for investigation or restrictions on trading. Generally speaking, broader awareness on the severe harms resulting from speculation on new shares has been gained from the market, and speculative investments have been restrained to a certain extent. However, there are still investors blindly participating in the speculative investments. According to the statistic data from the SZSE, accounts which recently participated in speculative investments in new shares showed overall losses, especially small and medium-sized retail investors. As of May 7, there are 56 new companies get listed on the SZSE this year. From the perspective of investors’ structure, individual investors, whose purchase amount was below 10,000 shares on the first trading day, account for 49.83 percent; from the perspective of gain and loss situation, individual investors who purchased new stocks on the first trading day encountered overall losses, while 54 percent individual investors, whose purchase amount was below 10,000 shares on the first trading day, suffered 84.62 percent loss amount of all individual investors; from the perspective of daily price change for new shares, small and medium-sized retail investors saw heavier losses regardless the new shares went higher or fell below the IPO price. New shares went higher on the first trading day, the individual investors lost heavier.
It is a systematic project to curb speculation on newly issued shares, one critical of which is the investor education and appropriate administration from securities companies. Innovation development is based on the premise that normalization, self-discipline, integrity and conscientiousness of securities companies. According to the requirements on the recent forum in respect of the innovation development of securities companies, securities companies should undertake industrial responsibilities, market responsibilities and social responsibilities; they should strengthen self-discipline and supervision and maintain favorable market order. Intensified efforts should be given in order to earnestly implement the four requirements raised by the Institution Division of the CSRC in the “Notice on Dutiful Performance of Securities Companies, Preventing and Restraining Speculation on New Shares” on March 12. The requirements are as follows: first, to emphasis investors risk education, and enhance investors’ awareness on the risks and harms involved in the blind speculation on new shares; second, to conscientiously undertake sponsor and underwriting responsibilities, never be the illegal pushing hands behind new shares; third, to adhere to the value investment, never follow the herd of speculative investments in the securities proprietary business and assets management business; fourth, to highlight the professionalism to constantly improve the quality for investment consulting services and research reports. Recently, the SZSE is jointly hosting a series of training and interchange events on investor protection with the Securities Regulatory Bureau. These events are themed by transparency, rationality and appropriateness. The SZSE will continue to push member units to optimize customer management systems, establish products classification evaluation systems, and issue targeted risk warnings.
