China securities regulator seeks to ease market panic over delisting risks
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Jun 06 2024
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Source: Yahoo Finance
- China's Securities Watchdog Statement: China's securities watchdog, the CSRC, does not anticipate a sudden increase in delistings of small-cap companies in the near future, despite fears among investors. The "survival of the fittest" mechanism is gradually being implemented.
- Market Trends: Investors are shifting away from small-cap stocks towards blue-chip stocks due to increasing risks associated with smaller companies. The small-cap CSI2000 Index has fallen by 9% this week, while the bluechip CSI300 Index has risen by 5% this year.
- Regulatory Measures: Under new chairman Wu Qing, the CSRC is implementing stricter regulations to boost market confidence. They have raised listing standards, targeted "zombie companies," and flagged nearly 100 companies for potential delisting.
- Investor Sentiment: Many investors are now focusing on industry leaders with strong fundamentals to mitigate uncertainty. Previously popular small-cap stocks are now being avoided due to the increased risk of delisting.
- Shift to Blue-Chips: Chairman Wu and investors like Niu Chunbao are advocating for a shift towards blue-chip stocks like PetroChina and Kweichou Moutai, emphasizing stability and sound investment choices.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
