A new board was officially launched in the Chinese mainland’s A-share market, the risk warning board. The bourse is part of the newly reformed de-listing mechanism, and it will be mainly used as a trading platform for shares preparing for de-listing or re-listing. The board dropped 1.5 percent at its first trading day.
A new year, and new opportunities for A-share investors.
43 companies’ shares are currently traded on the new risk warning browse at the Shanghai Stock Exchange. Their stock price can only move within a five percent band both ways. If the turnover rate reaches 30 percent, trading will be suspended. Any single account can only hold up to 500 thousand shares from the risk warning board. Analysts say this will help curb speculative behaviour.
Zhao Pengfei, researcher from the Financial & Securities Institute at China Renmin University, said, "If many investors try their luck on stocks with poor performance, capital will flow to them. This will hurt shares with better performance."
Meanwhile on the Shenzhen Stock Exchange, stocks of Powerise Information Technology and Jiangsu Chinese Online will be traded for 30 working days. They will then be de-listed from the A-share market, and shares will be transferred to the OTC markets. These two companies are the first batch to be delisted based on the new de-listing system.
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