On March 16, the Financial Stability and Development Committee Under China’s State Council held a special meeting to study the current economic situation and capital market issues. It is mentioned that with regard to China concept stocks, the regulatory agencies of China and the United States have maintained good communication, have made positive progress, and are working on forming a specific cooperation plan. The Chinese government continues to support various types of companies to list overseas.
China Concept Stocks ends multi-day decline
On the same day, the China Securities Regulatory Commission stated that it will continue to strengthen communication with US regulators and strive to reach an agreement on Sino-US audit supervision cooperation as soon as possible. We will promptly promote the implementation of new regulations on the supervision of overseas listing of enterprises, support all kinds of qualified enterprises to list overseas, and maintain smooth overseas listing channels.
On March 15th, local time, the China concept stock market ended a multi-day decline, with a clear rise. Several stocks rose more than 20%. Among them, Fog Core Technology led the rise, with a stock price increase of 40.16%; TouchPal’s stock price rose 36.92%, and three other stocks including Kingsoft Cloud rose by more than 20%.
Experts’ Views on China Concept Stocks
Industry experts believe that due to the release of heavy positive news at the meeting, the market of China concept stocks is expected to further recover.
“China’s concept stocks have fallen sharply recently, and the reasons come from many aspects.” Dong Zhongyun, the chief economist of AVIC Securities, said in an interview with a reporter from “Securities Daily” that the Federal Reserve will accelerate the tightening of liquidity and the overall decline in US stocks, but It is more that the market is worried about the China concept stocks themselves, and investors have lower expectations for the development prospects of the company. More importantly, based on the “Foreign Company Accountability Act” issued by the US SEC, China concept stocks face the risk of delisting, which makes US stock investors more cautious about investing in China concept stocks.
Dong Zhongyun said that the meeting released a positive signal, which will help eliminate some investors’ concerns about China concept stocks, which is expected to lead to a rebound in China concept stocks. However, it should be noted that although the domestic risks have likely bottomed out, some of the risks of Chinese stocks come from the United States, and further policy signals need to be waited for in this regard.
“For China concept stocks, the meeting has released a major positive signal, which has the purpose of stabilizing market expectations and also playing a positive role in boosting investor confidence.” Zheng Lei, chief economist of Baoxin Financial, told “Securities” A reporter from the Daily said that at present, although some China concept stocks have fallen significantly before. But on the whole, the basic market and development expectations of Chinese stocks have not changed significantly, and the market has a valuation repair market, which is expected to recover further.
Zheng Lei said, “For China concept stocks, it is recommended to list in Hong Kong, China or return to A-shares to avoid unnecessary shocks caused by geopolitical factors.”
Recently, the regulatory agencies of China and the United States are also actively communicating and frequently releasing positive signals. On March 11, the person in charge of the relevant department of the China Securities Regulatory Commission said that in recent years, the China Securities Regulatory Commission and the Ministry of Finance have continued to communicate with the American Public Company Accounting Oversight Board (PCAOB) and have made positive progress. It is believed that through joint efforts, the two sides will be able to make cooperation arrangements as soon as possible in line with the legal provisions and regulatory requirements of the two countries, jointly protect the legitimate rights and interests of global investors, and promote the healthy and stable development of the two countries’ markets. According to media reports, the US Public Company Accounting Oversight Board (PCAOB) also said recently that the committee is maintaining active communication with Chinese regulators, and has held talks several times recently, and the two sides are committed to reaching a cooperation agreement so that it can inspect Mainland China registered in the United States and some Hong Kong auditing firms engaged in Mainland business.
The China Securities Regulatory Commission continues to promote and improve the relevant systems for overseas listing of China’s enterprises
“In the context of China’s economic take-off, the rapid development of Chinese enterprises is obvious to all, and its growth potential is optimistic on a global scale. For Chinese stocks, the two countries have the ability to find solutions. As the audit and inspection issues are resolved, the China concept stocks will be beneficial in the medium and long term, and can enhance the trust of global investors in China concept stocks.” Tiger International Investment Research Team told the “Securities Daily” reporter.
In addition, the China Securities Regulatory Commission continued to promote and improve the relevant systems for the overseas listing of enterprises. At the end of last year, the China Securities Regulatory Commission solicited public comments on the Administrative Measures for the Recordation of Overseas Issuance and Listing of Securities by Domestic Enterprises (Draft for Comment), which clarified the procedures and regulatory requirements for the recordation of overseas issuance and listing of domestic enterprises, standardized the recordation of overseas issuance and listing, and ensured smooth recordation management. effective implementation.
“For a long time, the regulatory authorities have continued to expand the opening of the capital market to the outside world, constantly improve the relevant systems and rules for overseas listing, and support enterprises to list overseas in compliance with laws and regulations.” Zheng Lei said that overseas listing, on the one hand, it can make full use of the financing convenience of overseas capital markets. Enhance the sustainable financing capacity of enterprises and promote the development and growth of enterprises. On the other hand, enterprises can improve the level of corporate governance by integrating with international market rules and learning foreign advanced technology and management experience. In addition, it can enhance the influence of enterprises in the international market and create favorable conditions for developing overseas markets.
The Original article is from Securities Daily, the Chinese version is here.