It is another move by the China Securities Regulatory Commission (CSRC) to regulate the market amid a series of regulatory measures since the beginning of 2001. On Tuesday this week, PT (Particular Transfer) Narcissus was delisted for reporting loss figures for four consecutive years, the first listed firm that was driven out of Chinese securities market.

Whether China should take rigorous supervision measures once triggered hot debate among securities experts. Though the market demand for tightened supervision was high, real hard measures were actually taken into effect recently.

The adopting of delisting mechanism and the crackdown on market manipulation activities indicates the government's full determination and dedication in putting the market on to an orderly running track.

Insiders and investors hailed the actions. Yang Chengzhang, a securities analyst from the Shenyinwanguo Securities, noted that for investors, especially individual investors, these measures are positive news that are conducive to the long-term development of China's fledging market.

Statistics show that China now has more than 58 million stock investors, of which 70 percent are individual shareholders.

Experts noted that the punishment on the four investment consultary companies had rung an alarm bell for other institutional investors which had been or intended to do so. The four companies, through illegal activities, such as setting up individual accounts or round-transaction, brought the prices of Yi'an Technology up to the peak of 126.3 yuan from around 20 yuan at initial public offering. The stock then nose-dived after CSRC announced to investigate them.

"Price manipulation is only one form of fraud activities," said Gao Xiqing, vice-chairman of the CSRC, adding that the handling of the Yi'an case will have a deterrent effect on other investors.

The delisting also gave those companies dragged in losses a wake up call. The CSRC has formulated detailed policies on information disclosure and merging of the special treatment (ST) companies. Those failing to meet the demand in due period will be delisted.

In the past four months, the CSRC has adopted a dozen regulatory measures to improve share issuance, information disclosure, introduction of independent director system. The one under special highlights is CSRC's invitation of former Vice- Chairwomen of Hong Kong's Securities and Futures Commission (SFC) Laura Cha Shih May to take the post of vice-chairman of CSRC.

The stock market, however, went up smoothly amid all these measures. Analysts say that this proved investors' positive attitudes towards the supervision.

Statistics show that by the end of last year, China has had more than 1,200 listed companies on its Shanghai and Shenzhen stock exchanges, with a total share value standing at 48 trillion yuan. In 2000 alone, domestic companies raised over 320 billion yuan through the stock market.

(Xinhua 04/26/2001)