The Chinese stock market has been falling continuously. The series of actions by China's official government seem to be unable to soothe the hearts of the majority of stock investors and the continued decline of stock prices. In the past three weeks, mainland stocks have fallen by 30%. Many listed companies simply suspend trading. Most of the suspended companies are concentrated in the GEM of the Shenzhen Stock Exchange. On July 7, more than 1,400 companies in the Shanghai and Shenzhen Stock Exchanges have been suspended. On July 8, 57 companies in the Shanghai Stock Exchange and 384 listed companies announced that they will suspend trading. Judging from the total of 2,808 listed companies in China, the number of suspended trading has exceeded half of the Chinese stock market. The suspension of
was originally intended to ensure the circulation of information in the stock market and maintain fair operation of the stock market. The measures taken when the company has major activities such as sensitive information that affects the stock price, interest allocation and share allocation, or financial reports are not fully disclosed, such as information asymmetry. However, this time, the Chinese stock price plummeted, but was used by listed companies to avoid the limelight. Observe the reasons for the suspension of trading on the Shanghai Stock Exchange and Shenzhen Stock Exchange companies, and often apply for suspension of trading on their own based on reasons such as "major matters not announced", "announcement of abnormal fluctuations in stock trading not disclosed", and "announcement of related matters".
Some netizens called the suspension of the company a "conscientious company" and "no trading, there will be no harm." However, Yi Xianrong, a researcher at the Institute of Finance of the Chinese Academy of Social Sciences, analyzed that judging from the fact that the largest wave of suspension of listed companies in history in the Chinese stock market in the past two days, equity pledge may become the next main risk point for forced financing leverage closing. This wave of suspension of trading may be the major shareholders of various companies who use their stocks to mortgage their loans from banks or trusts through "equity pledge". Now that the stock price plummeted, the face value of the stock price is locked down by suspension of trading, so that they will not be forced to close their positions.
Singapore IG Asia Pte Ltd strategy analyst Bernard Aw believes that the suspension may affect investor confidence. When trading resumes, investors will still sell their stocks unless there is a huge change in the market.
. The suspension of trading of more than half of listed companies has also caused a slowdown in market liquidity, which will force leveraged investors to sell any stocks that can find buyers. Northeast Securities analyst Du Changchun believes that large-cap blue-chip stocks with stable funds will be the first to bear the brunt of the market, and the effect of the market protection may be greatly reduced by then. Whether these leveraged investors will take the lead or change the allocation of foreign production to exchange for cash will cause the stock markets in other countries to suffer.
Is it really effective for corporate suspension of trading? Or push the whole into a more endless abyss.
Shanghai Composite Index collapsed 8% at the opening of the market today (8th), and finally closed at 3507.19 points, down nearly 220 points, a drop of 5.9%. The Shenzhen Component Index finally reached 11040.89 points, down 334.72 points, down 2.94% again.
(First image source: Dazhi Image)
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- Release date July 8, 2015 22:45
- Category Finance
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