Speculative funds repeatedly trigger circuit breakers as Chinese start-ups endure volatile Wall Street trading

Chinese start-ups Qutoutiao, Nio and Pinduoduo experienced abrupt surges last week and repeatedly triggered circuit breakers, as analysts suspect speculative funds may have hyped up the recently listed stocks.

“These recently listed IPOs all have a relatively small market float which means the stock price can be easily pushed up or down with only small amount of trading,” said Wang Guanxiong, a Beijing-based investor.

He said US investors are generally not familiar with most Chinese stocks, especially newly listed companies that do not have much financial data yet.

“The extremely large swings indicate at least some speculative activities.”

Stanley Chik, head of research at Hong Kong-based Bright Smart Securities, said hot money may have played a part in the abrupt surges in these US listed Chinese companies, as there is not much fundamental support.

Besides, the US market has drawn increased fund inflows this year and outperformed many global peers. But US-listed Chinese stocks have not really caught up with the gains.