Apr 17, 2024 05:56 PM
FINANCE
Regulatory Moves Triggered Latest Slump in Chinese Small Caps, Insiders Say
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The Chinese mainland’s small-cap stocks can suffer wild price swings in the face of large trades because of a lack of liquidity.
A two-day slump in Chinese small-cap stocks was triggered by new regulatory guidelines that tightened oversight of listed companies and dampened investor enthusiasm for the shares, industry insiders said.
The Wind Micro Market Cap Index, which tracks 400 of the smallest-cap Chinese mainland-listed companies with a market value typically between 1.3 billion yuan ($180 million) and 2.5 billion yuan, lost 8.9% on Monday and 10.6% on Tuesday, before recovering some of its losses on Wednesday, when it closed 9.7% higher amid a broad market rally.
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