Regulator denies shift in M&A policy on virtual industries

A visitor plays VR games at the three-day Consumer Electronics Show Asia 2016 in Shanghai, which ends on May 13. The event showcases the latest VR products including headsets, glasses and accompanying content displayers. [Photo provided to China Daily]

China's top securities regulator said on Friday that current policies on refinancing and mergers and acquisitions by listed companies remain unchanged.

The China Securities Regulatory Commission was responding to an earlier media report the regulator had banned companies from selling new shares to invest, or conducting mergers and acquisitions in four sectors: online finance, gaming, film and television, and virtual reality.

"The regulator actively encourages qualified listed companies to refinance and conduct mergers and acquisitions in an effort to allow the capital market to serve the real economy," Deng Ge, CSRC spokesman told a news conference.

Deng said that the regulator will make an official announcement if there is any adjustment to the rules.

Stocks in the related sectors experienced sharp volatility after a media report on Wednesday claimed the regulator had halted refinancing and M&A activities in those four sectors.

On Friday, the benchmark Shanghai Composite Index slipped 0.3 percent to 2,827.11.

Chinese stocks fell for a fourth week, capping the longest string of losses in two years, as metal prices dropped and the yuan weakened amid concern the government will hold off from new stimulus even as growth falters.

The Shanghai gauge slid 3 percent this week, led by energy and material companies.

The Hang Seng China Enterprises Index dropped 10 percent from the April high, entering a so-called correction.