Over 350 stocks resume trading following rally
Share prices on Chinese mainland stock markets continued to rise on Monday, with more than 350 listed companies resuming trading on the two bourses.
The Chinese government's efforts to prop up the stock markets and stabilize the country's economic growth have not only restored investor confidence but also in many listed companies, which have hastened their return to trading, analysts said.
The Shanghai Composite Index rose 2.39 percent or 92.59 points to close at 3,970.39 points, while the Shenzhen Component Index climbed 4.78 percent or 576.02 points to close at 12,614.16 points on Monday.
The small caps continued their bullish trend since Thursday and led the rally on Monday. ChiNext, the country's NASDAQ-style board for high-tech companies and startups, jumped 5.80 percent, or 147.19 points to close at 2,683.07 points, with about 200 stocks surging to their daily trading limit of 10 percent in the morning.
Nonferrous metal, computer equipment, agriculture and household electronic appliance stocks all performed well.
The rally came at a time when the Chinese government implemented measures to stabilize the stock markets. On Monday, China's securities regulator met with senior executives of Hundsun Technologies Inc., a financial software company and Internet financial service provider.
Media reports cited a Hundsun employee as saying that the talks are aimed at designing a plan for over-the-counter distribution.
The government also launched a batch of unprecedented emergency rescue measures last week to prevent share prices from dropping further, such as investigating "malicious" short-selling activities, stretching the deadline for stock loans, as well as a promise from State-owned banks not to sell shares they own in listed companies.
Sun Lijian, director of the Financial Research Center at Fudan University, told the Global Times on Monday that the government measures have proven effective in curbing the slump, and that the mainland stock markets are stabilizing.
Wang Zhaoxiang, a stock investor from Yangzhou, East China's Jiangsu Province, told the Global Times on Monday that the government measures have restored his confidence in the markets.
"Last week, I decided to quit playing the markets, but the government's urgent measures to save the stock markets gave me confidence that A-shares will continue to be bullish like the past few months," Wang said.
More than 1,300 stocks suspended trading on the two bourses as of Friday, accounting for almost half of the companies listed on the two bourses.
Wang Yaqian, a stock analyst at Beijing-based market research consultancy iResearch, said the fact that more than 350 companies resumed trading on Monday showed that the government's stabilizing measures have restored confidence in many listed companies.
But he also said that since stock trading of more than 1,000 companies remains suspended, the A-shares rally still lacks a solid foundation.
"The companies should resume trading in an orderly way to prevent another wave of fluctuations on the stock markets," Wang Yaqian said.
According to Sun, many of the enterprises that suspended stock trading involved margin trading activities, and the large amount of borrowed money used to buy stocks are likely to lead to further fluctuations, after they resume trading on the stock markets.
"Therefore, it's hard to say whether the recent rally can be sustained over a long period of time," said Sun.
According to the Securities Times report, 146 stocks that suspended trading were involved in margin trading activities totaling more than 180 billion yuan ($29 billion).
Sun said that the future performance of domestic stock markets also relies on the performance of listed companies. "If the companies perform better, investors are more likely to hold on to their shares for a longer time," Sun said.
