GOVERNMENT ISSUES MEASURES TO CONTROL STOCK PRICES

The China Securities Regulatory Commission orders fund managers to behave and not to sell large holdings of stock into a falling market, in an attempt to rebound the stock prices.

“The objective behind it is quite obvious,” said John Flanigan, co-managing partner at Salans' Shanghai office. “[The government wants to] prevent the market from plummeting after the [earthquake] disaster, especially since the Chinese A-share market has lost nearly 50% of its market capitalization from its peak last October.”

Lawrence Guo, partner at Broad & Bright, said the government's move will strengthen the confidence of public fund investors as well as the credibility of fund management companies. “It is a serious step taken by CSRC to enforce securities fund management regulations and to curb violations by fund managers.”