Enthusiastic Applause for the Regulators' Response to N-CIMC's Price Action!
2006/6/20 11:51:24
Nowadays, online mob mentality is rampant — the recent sensationalized incident is just one very ordinary example. Yesterday, N-CIMC's price action triggered a chorus of howling from internet mobs. This ID refuses to see this violent philosophy succeed, and immediately after the close wrote "Despise All Those Who Didn't Dare Buy N-CIMC at 15 Yuan and Now Sour-Grape at 50 Yuan!", strongly arguing that the price action must be evaluated based on laws and existing rules, and that we cannot return to the old ways of incidents like the 327 affair.
This ID has never been one to say nice things about regulators, always believing that regulators should be treated like children — scolded more so they improve. The only previous time this ID vigorously applauded the regulators was during the most brutal bloodbath when the share reform was announced last year, with three consecutive posts applauding the regulators' determination to resolve the issues. And today, applause must be given once again, for their response to N-CIMC's price action: the Shenzhen Stock Exchange stated that CIMC International's performance was normal and would not be investigated.
First, having the exchange rather than the CSRC respond to this matter conforms to proper procedure. If such a minor matter as one stock's single-day price action required the CSRC to intervene, it would be as absurd as taking a child's sandbox dispute to court. Second, "performance was normal" is a concept that can be verified against rules — as long as trading rules were followed and there were no abnormal concentrations of capital, any price action should be permitted. Lastly, this incident shows that the current regulators are becoming increasingly mature, while many so-called retail investors are still quite immature, making a big fuss over trivial matters and becoming a laughingstock.
As for how N-CIMC trades going forward, that's purely a market matter. The regulators should of course intervene even less. This N-CIMC case provides the best precedent for future regulation. Hopefully they will continue in this spirit, so that China's capital markets will have fewer embarrassing episodes.