China’s securities regulator touts long-term value investing to soothe investors amid pessimistic yuan-share outlook
- At a forum in Shanghai, CSRC Chairman Yi Huiman also pledges to crack down on malfeasance to protect China’s 218 million investors
- CSRC will also continue to encourage sales of stock-focused funds, possibly with tax breaks and favourable accounting rules as incentives, Yi says
The head of China’s stock-market regulator sought to soothe investors on Thursday by encouraging them to turn to long-term value investing, a strategy that has made a comeback at the start of this decade after underperforming growth since the global financial crisis.
The strategy of long-term value investing is the key to delivering stable returns in China’s 82 trillion yuan (US$11.5 trillion) stock markets, Yi Huiman, chairman of the China Securities Regulatory Commission (CSRC), said at the Lujiazui Forum in Shanghai. He based his argument on an average of 8 per cent return generated annually by China’s social-security fund from the stock market over the past decade.
Meanwhile, Yi also pledged to crack down on malfeasance, from manipulation to accounting fraud, to protect the interests of the nation’s 218 million stock investors, the largest such group in the world.
“Given the experience from the global mature markets, long-term and patient capitals such as pension and insurance funds manage to overcome short-term market volatility and reap long-term returns,” he said at a speech delivered to the two-day financial gathering.
