China has taken another small step towards its first delisting of a company by saying that it would soon announce rules for stripping deadbeat companies from the stock market.
'The bell tolls for delisting,' read a headline in the China Securities newspaper. The same publication and other financial dailies published a brief report stating that delisting procedures would be announced soon.
The sabre-rattling scared investors enough to sell down most of the stocks in the Special Trading category - those shares subject to trading curbs because of deep financial difficulties.
'This is a signal to investors that there is risk in the market,' said Peng Xiaoquan, an analyst at Guotong Securities in Shenzhen.
'There is lots of irrational investment in the market.'
Fourteen of the so-called Special Trading companies in Shanghai and 19 in Shenzhen fell their 5 per cent limit yesterday.
