FINANCE

China’s Stricter Rules, Sluggish Market Lead to Surge in Delisting

Published: Aug. 21, 2024 4:11 p.m. GMT+8

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From January to July, over 40 companies on the Shanghai or Shenzhen stock exchanges were delisted or slated for delisting, nearly as many as in all of 2023. Photo: VCG

China’s tightened delisting rules have led to a rapid increase in the number of companies booted from stock exchanges while leaving many others on the brink, as investors have dumped lower-priced stocks amid a sluggish market.

In the first seven months of this year, more than 40 companies traded on the Shanghai or Shenzhen stock exchanges were either delisted or slated for delisting, nearly as many as in all of 2023, according to Caixin calculations based on available records from the bourses.

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More than 40 companies were delisted or set for delisting from Shanghai and Shenzhen exchanges in the first seven months of this year, nearly matching all of 2023.
The delisting rules, effective Dec. 31, 2020, target companies with stock prices below 1 yuan for 20 consecutive trading days.
Even companies with decent operations face delisting risks due to poor stock prices amid investor caution in a sluggish market.

AI generated, for reference only

What Happened When

Dec. 31, 2020：: Delisting rules took effect, making it easier to remove poorly performing, shell, and zombie companies from stock exchanges.

In the first seven months of 2024：: More than 40 companies traded on the Shanghai or Shenzhen stock exchanges were either delisted or slated for delisting.

By July 2024：: A total of 76 A-share companies have either been delisted or are set to be delisted due to their stock price closing below 1 yuan for 20 consecutive trading days; over 30 of these are from 2024 alone.

AI generated, for reference only