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China small-cap shares sink to 2015 low

Jul 17 2017 09:33
Jeanny Yu and Justina Lee, Bloomberg

Shanghai - Chinese small-cap shares tumbled, leading the market lower, amid concerns about tougher regulations and more initial public offerings (IPO) following a high-level conference over the weekend attended by President Xi Jinping.

The ChiNext gauge of mostly technology companies sank 5.1% at the close to their lowest level since January 2015. The Shanghai Composite Index dropped 1.4%.

President Xi said the central bank will play a stronger role in defending against risks, and called for more work on safeguarding the financial system and modernising its regulatory framework. The regulator approved nine IPOs for a second week in a row on Friday.

Data released Monday showed China’s economy grew a faster-than-expected 6.9% in the second quarter from a year earlier.

The weekend meeting has got investors worried about tighter rules in the financial market, said  Zhang Gang, Shanghai-based strategist at Central China Securities. “People are rushing to cut risks. ChiNext companies got hurt most from such risk-off sentiment, as many ChiNext firms are highly leveraged.”

sMALL CAP

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equities  |  markets  |  china stocks

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