CHINA’S top security regulator sought to ease concerns about burgeoning stock market volatility, after Friday’s wild price swings capped the worst three-week rout for mainland equities in more than a year.

The recent gyrations were due to “external factors,” but these are not the dominant elements in China’s stock market development, said Yi Huiman, chairman of the China Securities Regulatory Commission, in a speech in Beijing on Saturday. Economic fundamentals and the quality of listed companies should remain the main long-term drivers for share prices, he said.

Yi’s remarks are the first comments on stocks from a top-level official after the Shanghai Composite Index ended last week down by 4.5 percent, even after buying from State-backed funds Friday helped drive the index to its steepest one-day gain since March. Renewed trade tensions with the United States and signs the economic recovery remains fragile have unnerved investors.

The securities chief moved to encourage greater risk taking soon after his appointment in January. Even after a 10 percent slump over the past three weeks, China has the world’s best-performing major stock market this year. Equities on the mainland have bounced back from the 2018 rout that wiped out US$2.4 trillion in value to make it the globe’s worst share market.

Yi said Saturday the commission is looking for ways to delist some shares, because “zombie” and “empty-shell” companies need to be resolutely removed from the market.

Yi said the regulator would step up supervision of listed companies with a focus on governance, including information disclosure and internal controls, and would not tolerate collusion between intermediary firms and listed companies.

(SD-Agencies)