Some 51pc of A-shares in Shanghai and Shenzhen suspend trading; but markets extend rout

Mainland Chinese stocks tumbled sharply at the open on Wednesday as sell orders piled up in an increasingly fragile market where an unprecedented 51 per cent of all listed shares are now voluntarily suspended from trade, locking up some US$2.2 trillion of previously tradeable market capitalisation.

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Some 51pc of A-shares in Shanghai and Shenzhen suspend trading; but markets extend rout

Enoch Yiu
08 July 2015

Mainland Chinese stocks tumbled sharply at the open on Wednesday as sell orders piled up in an increasingly fragile market where an unprecedented 51 per cent of all listed shares are now voluntarily suspended from trade, locking up some US$2.2 trillion of previously tradeable market capitalisation.

A total of 660 mainland Chinese companies have requested that trading in their shares be suspended on Wednesday in an attempt to stave off the rout in the country’s equity markets, bringing the total number of shares suspended in the mainland to 1,429 or 51 per cent of all stocks listed in the Shanghai and Shenzhen exchanges.

Some 509 Shenzhen companies, most of whom are listed on the SME and ChiNext Board, as well as 151 Shanghai A-shares made the announcement late on Tuesday night that trading in their shares be suspended from Wednesday.

Most of the companies gave the reason that they “have some important project in preparation” and would give further announcements within the next five days.

The Shanghai Composite Index opened 6.97 per cent lower to 3,467.04 and the Shenzhen Composite Index slid 4 per cent to 1,854.22. ChiNext, the Nasdaq style technology board in the mainland, fell 2 per cent to 2,304.76, after a drop of 5.69 per cent on Tuesday.

In Hong Kong, the market followed mainland markets lower as the key Hang Seng Index opened 4.52 per cent lower, retreating 1,128.67 points to 23,846.7 at the start of trade.

The H-shares index which tracks Hong Kong-listed Chinese companies, began 6.59 per cent lower to 11,048.04. The index crumbled to end at a three-month low on Tuesday.

Stockbrokers believe many of these companies opted for suspension to prevent their shares from getting run over in the market rout.

Both Shanghai and Shenzhen have reeled from a massive sell-off after hitting 7-year highs on June 12, and the two are now in bear market territory.

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