Rout freezes trading in over 1,300 firms
Selling by leveraged traders takes its toll on stocks even as the central bank says there will be ample liquidity for the market
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A WAVE of Chinese companies halted trading in their shares and regulators unveiled new measures to prop up the value of small-cap stocks in the latest attempts to stem a rout that has wiped more than US$3.5 trillion of value.
At least 1,323 companies have halted trading on mainland Chinese exchanges, locking up US$2.6 trillion of shares, or about 40 per cent of the market's capitalisation. China Securities Finance Corp is seeking at least 500 billion yuan (S$109 billion) to support equities, people familiar with the matter said on Wednesday, after the central bank said that it would provide "ample liquidity" to the market. Margin requirements were raised on small-cap index futures, while state-owned companies were ordered not to sell shares.
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