The Shenzhen Stock Exchange introduced a new rule yesterday aimed at curbing rampant speculative trading on its soon-to-be-launched Nasdaq-style second board.
The bourse said in a statement a stock would be suspended from trading until 2.57pm, three minutes before closing, if its shares jumped or fell 80 per cent from the opening price on the first day of trading.
The announcement signalled regulators were increasingly worried about stability on the board for start-up firms, analysts said.
On the Shenzhen exchange, trading will be suspended for 30 minutes if a newly listed stock gains or loses more than 20 per cent from the opening price. The bourse will halt trading for another 30 minutes if the shares climb or plunge 50 per cent.
The China Securities Regulatory Commission is set to officially start the second board next month, giving the mainland's cash-hungry small firms access to stock market funds.
'It is for sure that many speculative funds will dart in and out of the small-cap stocks when they are listed,' said Essence Securities analyst Liu Jun. 'It will eventually come down to whether the watchdogs can control the risks.'
The new trading rule will make it harder for investors to speculate on the stocks during their trading debut on the growth market.
