Half of Chinese Stocks Halt Trading

More than half of all listed Chinese companies have suspended their own shares as Beijing struggles to contain a massive stock rout.

At least 1,430 of the 2,800 companies traded in China have elected to pull their shares as markets continue their crazy roller-coaster ride, according to state media.

The number keeps ticking upward — on Wednesday morning alone, hundreds of firms announced a halt in trading, according to a review of stock exchange filings.

Companies — particularly small and medium-sized firms — are clearly nervous about taking a nasty hit due to recent market fluctuations.

Zhejiang Great Southeast, a plastics manufacturer traded in Shenzhen, suspended its shares on Tuesday, due to “the uncertainty of the situation, and in order to avoid unusual stock price volatility and to safeguard the interests of investors.”

Another firm, Hangzhou First PV Material, a solar company listed in Shanghai, halted trading Wednesday to avoid abnormal market fluctuations from killing its shares, according to a company filing.

Company shares can be suspended for months, even years — all subject to regulatory approval. While firms doing this now may find some defense against volatility, it’s possible that they are only delaying the inevitable.

via CNN

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza