The Shanghai and Shenzhen stock exchanges have issued new rules aimed at curbing speculation on newly listed stocks during their trading debuts, in line with mainland regulators' determination to protect small investors.
Trading of newly listed shares on the Shenzhen bourse would be suspended until 2.57pm if the shares rose or fell by more than 10 per cent from the opening price, the exchange said in a statement.
In addition, if more than 50 per cent of shares in a company change hands on their first day of trading, dealing in the shares will be halted until 2.57pm.
Two companies - Jiangxi Boya Biopharmaceutical, and Shenyang Blue Silver Industry Automation Equipment - yesterday saw trading of their shares suspended under the new rule.
' Rampant first-day trading largely distorted prices of newly listed companies,' the Shenzhen exchange said. 'It hurt the interests of investors.'
The new rule backed the stated intention of regulators to crack down on speculators who chased short-term gains through wild price swings, analysts said.
Under a previous rule governing first-day trading, the Shenzhen exchange would halt trading of a newly listed stock for 30 minutes if its shares rose or fell by more than 20 per cent from their opening price.