China’s new chief securities regulator is quickly winning over investors, spurring online speculation that his reverence for markets and easy demeanor signal he’ll employ a lighter touch than his predecessor.
China Securities Regulatory Commission Chairman Yi Huiman kicked off his first press conference in Beijing on Wednesday with a call to “revere the market, and respect and follow market patterns.” That’s a stark contrast with the stance of his predecessor Liu Shiyu, who stressed “regulation according to the law, strict regulation and comprehensive regulation.”
Asked if running the CSRC was like “standing at the mouth of a volcano,” Yi chuckled and agreed.
China stocks are in a rally so sudden that a bull market has materialized about a month after he took office. That’s all the more surprising because they were among the worst performers in the world last year.
One of Yi’s major tasks is to professionalize the country’s 148 million retail investors, a challenge highlighted by an inexplicable surge in stocks with the same Chinese character as his surname on the first trading day after his appointment. The Shanghai Composite has gained about 14 percent during his tenure, as he’s lifted trading curbs meant to keep speculators in check and rallied support for a new trading venue in Shanghai for tech companies.
“From Yi’s debut, I feel like the regulators want to handle the market with care,” a person using the alias “Old Wang’s Stock Stories” said on Weibo, China’s equivalent of Twitter. “Only with enthusiasm in the market can the new tech and innovation board be achieved without extra effort.”
Yi’s accommodating tone reflects in part the hand he was dealt after a bearish year for stocks. Liu became head of the CSRC in 2016, when the market was still recovering from the worst crash in decades, with a mandate to crack down on speculation.
“Yi’s prime task is to launch the tech and innovation board, and for that to be successful, the market needs to pivot back to normal and have reinvigorated activity,” said Daniel Xu, a fund manager at Beijing Eastern Smart Rock Asset Management Co. “Liu Shiyu’s job was to put an end to financial corruption.”
Jokingly alluding to Liu’s attempts to soothe the market in October last year by saying that “Spring is not far away,” another Weibo user remarked, “Now I’m getting a strong whiff of Spring.” Bloomberg
No Comments