Translated by Andrew Vanburen from a Chinese-language piece in Sinafinance
TOP-END PAY GRADE executives from 20 major funds plying China’s equity markets met in Beijing recently to push their proposals for bourse rejuvenation and put forth ideas to promote steady growth and reform in the PRC equity markets.
Following the weeklong combined Mid Autumn/National Day holiday break, which gave the embattled China stock markets a much needed nine days devoid of trading, the movers and shakers in the PRC’s financial sector decided it was high time to put their cutthroat competition aside and convene in the country’s capital to brainstorm on ways to breathe a bit of life and vitality into the beleaguered A-share markets.
So although the participants were just a fraction of China’s power base in the brokerage industry, their meeting in a conference room at the bourse watchdog – the China Securities Regulatory Commission (CSRC) – was a breakthrough in intra-sector cooperation at a time when continued go-it-alone policies are seen as a dead-end deal.
The get-together can be seen as a “meet and greet” among a virtual new generation of financial sector leaders, as the turnover and ship-jumping volume has skyrocketed for much of 2012 as brokerages and AMCs struggle to find the right mix of management and fund managers to maximize profits for both the firms and investors.
But of course, this is never an easy task.
Beyond a rote business card exchange opportunity amongst a new generation and cycle of stockbrokers and fund managers, the get together provided an opportunity to understand the positions of peers and rivals, with newly-appointed chairman of the CSRC assistant Zhang Yujun having a captive audience in which to exchange ideas with top leadership from the country’s most powerful and influential fund managers.
The good news for retail investors in China’s A-shares is that the crux of the conversations revolved around and repeatedly returned to a single overriding theme.
Namely, all present were ultimately concerned with understanding and perhaps bracing themselves to adopt those measures which might best accomplish two objectives:
Rejuvenating the sluggish Chinese equity markets and better protecting the rights as well as the welfare of investors had top billing at the conference.
This was Mr. Zhang’s first such meeting and it can only be hoped that his wishes and those of the fund managers are within a manageable sphere of practicality and conciliation.
Nothing short of the fate of hundreds of millions of Mainland Chinese investors – as well as those foreigners playing the A-share markets – are at stake.
As AMCs and funds were battered on bottom lines in the first six months of this year, it can only be assumed that they were playing hardball with the CSRC representative.
One fund executive said that the string of comforting statements from the bourse oversight body was comforting on an emotional level, but did little to address the fundamental problems and obstacles preventing China’s stock markets from emerging from their months-long slump.
Whether or not the stock market regulator takes to heart the heartfelt grievances of the fund managers in attendance cannot be determined by the upside or downside directionality of the benchmark Shanghai Composite Index over the ensuing trading days.
But it is hard not to imagine that the watchdog and the FMs are not on the same page, and that the oft-cited “win-win” scenario will not be a common objective sought by both sides.
It is unfortunate for retail investors that the CSRC’s Zhang insisted throughout that the finer details of the symposium should be prohibited from being shared with those outside the room.
It can only be hoped that the finer points – or better angel proposals – of the meeting are manifested in a palpable uptick in the Chinese equity markets.
Only time will tell.
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