Investors trying to sell Chinese shares have found themselves locked out of 72 percent of the market.
At least 1,331 companies have halted trading on mainland exchanges, freezing $2.6 trillion of shares, or about 40 percent of the country’s market capitalization. Another 747 fell by the 10 percent daily limit on Wednesday, making it all but impossible to find buyers at the prevailing price.
The suspensions, which cast doubt on authorities’ pledge to give markets a greater role in the world’s second-largest economy, mean that the Shanghai Composite Index’s 5.9 percent tumble on Wednesday was probably understated. Investors who got stuck in their positions are turning elsewhere to raise cash, fueling the biggest drop in a month in Chinese government bonds and helping send Hong Kong’s Hang Seng Index to a 5.8 percent tumble.
“It’s absurd, stopping trading just because they don’t want stocks to fall,” said Tsutomu Yamada, a market analyst at Kabu.com Securities Co. in Tokyo. “They’re going all out in trying to stop stocks from falling but it’s not working.”
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