“Would a buffer fund’s priority be to steady the market, or to ensure the safety of its capital and boost its returns?”

Pricing on the Chinese stock market is still dependent mostly on government signals, but I have been glad to see recently that these signals have been looking away from short-term gain and towards long-term market stability.

 The China Securities Regulatory Commission (CSRC) is drafting a new rule that will require domestic companies to exclude stock investment gains from profits when seeking initial public offerings or secondary share sales. 

The stock regulator has long demanded that firms report a profit for three straight years in order to qualify for IPOs, and barred loss-making listed firms from selling additional stocks. However, high returns from last year’s staggering stock rise, in which Chinese companies reaped a cumulative RMB 250 billion (USD 36.6 billion) from equity investment, artificially inflated profit ...... financial quality of public companies would also help. A delisting mechanism should be established to force unqualified firms to quit the market. And criteria should not be based only on profit-related considerations. Any wrongdoing by a firm to hurt the interest of minority investors should also be considered. 

I appreciate the government’s move to bring more order to the market. I just hope more measures to tackle the industry’s underlying problems will be pushed forward soon.