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Wednesday, 30 September 2009
Regulator warns on price fixing on second board
The mainland’s securities regulator yesterday vowed to react quickly to any trading irregularities when the nation’s Nasdaq-style second board opens in a few weeks’ time, warning investors not to attempt any price manipulation.
The mainland’s securities regulator yesterday vowed to react quickly to any trading irregularities when the nation’s Nasdaq-style second board opens in a few weeks’ time, warning investors not to attempt any price manipulation.
The China Securities Regulatory Commission said it had made special arrangements to oversee the growth market, since officials are aware of a potential roller-coaster ride on the second board, according to a CSRC statement.
However, the regulator did not provide details about the supervision system.
“The second board is facing risks of over-speculation, insider trading and market manipulation,” the statement said. “Special arrangements have been made to ensure the regulations are much stricter than the main board.”
The regulator said the Shenzhen Stock Exchange and CSRC branches across the nation would immediately take action to stop any questionable transactions.
In the past, questionable accounts were frozen until the exchange collected hard evidence of alleged insider trading.
In mid-August, the Shenzhen exchange said it had uncovered more than 40 brokerage accounts allegedly used to manipulate initial public offering share prices on their first trading days. The exchange issued its announcement nearly one month after the stocks were listed on the bourse.
The CSRC held a working conference over the weekend to better prepare the policing mechanism for the second board, which is expected to debut in the middle of next month.
The conference followed an announcement by the Shenzhen bourse last Thursday, which introduced a new rule aimed at curbing wild trading on the technology-heavy market.
Under the rule, a newly listed stock on the growth market will be suspended from trading until 2.57pm, three minutes before closing, if its shares rise or fall 80 per cent.
“Investors are no longer interested in existing stocks ahead of the launch of the second board,” said Kingsun Investment Management analyst Dai Ming. “But not all the stocks will be worth buying and some investors will have to lick their wounds in future.”
The first batch of 10 firms due to list on the second board conducted their online subscriptions last Friday. The companies offered their shares at an average price-earnings ratio of 55, based on their results last year.
Analysts predicted the price-earnings multiple would probably hit 100 when they debut on the market next month.
“All the investors I know believe the prices will surge,” said Chen Peijun, a retail investor who has 10 years’ experience in stock investing. “My conclusion is to boldly buy the shares on the first trading day.”
Beijing fast-tracked listing approvals for the second board recently, allowing the first 10 firms to kick off their flotation exercise ahead of the National Day holiday, three weeks ahead of schedule. The first batch of companies will net nearly 3 billion yuan (HK$4.05 billion) from the market.
Yesterday, nine more start-up firms received approval to start selling their shares on October 9.
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Regulator warns on price fixing on second board
Daniel Ren in Shanghai
29 September 2009
The mainland’s securities regulator yesterday vowed to react quickly to any trading irregularities when the nation’s Nasdaq-style second board opens in a few weeks’ time, warning investors not to attempt any price manipulation.
The China Securities Regulatory Commission said it had made special arrangements to oversee the growth market, since officials are aware of a potential roller-coaster ride on the second board, according to a CSRC statement.
However, the regulator did not provide details about the supervision system.
“The second board is facing risks of over-speculation, insider trading and market manipulation,” the statement said. “Special arrangements have been made to ensure the regulations are much stricter than the main board.”
The regulator said the Shenzhen Stock Exchange and CSRC branches across the nation would immediately take action to stop any questionable transactions.
In the past, questionable accounts were frozen until the exchange collected hard evidence of alleged insider trading.
In mid-August, the Shenzhen exchange said it had uncovered more than 40 brokerage accounts allegedly used to manipulate initial public offering share prices on their first trading days. The exchange issued its announcement nearly one month after the stocks were listed on the bourse.
The CSRC held a working conference over the weekend to better prepare the policing mechanism for the second board, which is expected to debut in the middle of next month.
The conference followed an announcement by the Shenzhen bourse last Thursday, which introduced a new rule aimed at curbing wild trading on the technology-heavy market.
Under the rule, a newly listed stock on the growth market will be suspended from trading until 2.57pm, three minutes before closing, if its shares rise or fall 80 per cent.
“Investors are no longer interested in existing stocks ahead of the launch of the second board,” said Kingsun Investment Management analyst Dai Ming. “But not all the stocks will be worth buying and some investors will have to lick their wounds in future.”
The first batch of 10 firms due to list on the second board conducted their online subscriptions last Friday. The companies offered their shares at an average price-earnings ratio of 55, based on their results last year.
Analysts predicted the price-earnings multiple would probably hit 100 when they debut on the market next month.
“All the investors I know believe the prices will surge,” said Chen Peijun, a retail investor who has 10 years’ experience in stock investing. “My conclusion is to boldly buy the shares on the first trading day.”
Beijing fast-tracked listing approvals for the second board recently, allowing the first 10 firms to kick off their flotation exercise ahead of the National Day holiday, three weeks ahead of schedule. The first batch of companies will net nearly 3 billion yuan (HK$4.05 billion) from the market.
Yesterday, nine more start-up firms received approval to start selling their shares on October 9.
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