Stock Suspensions Ebb

Kent Troutman (PIIE) and Zixuan Huang (PIIE)
July 18, 2015

As Chinese official took drastic measure over the last two week to slow the free fall equity market, the number of stocks that ceased trading activities spiked. At the peak on July 8th, 1347 stocks were suspended which represented 49% of the total number of stocks and 31% of market capitalization. Suspensions have since come down as volatility and trading volumes have ebbed. During this time, at most two stocks were suspended due to price changes beyond the legal limit (股价异动). Most stocks were suspended due to the euphemistic reasons of “major issues” (重大事项) or “major asset restructurings” (重大资产重组).

Stock trading suspensions in Shanghai and Shenzhen, as percent of total number of stocks and as percent of total market capitalization

COW suspended stocks Source: Wind

Comments

Simon

Hi,

Caixin reported that 1,442 companies were suspended by July 9th. Do you know why their numbers differ?

http://english.caixin.com/2015-07-16/100829521.html

ktroutman

simon, that's right. i was showing the data as of the peak of suspensions by market value (7/8), whereas the peak of suspensions by number (7/9) was 1443 according to my data. reason is percent of market value is more relevant to the functioning of the equity markets.

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