Delisting on ChiNext may become easier
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The Shenzhen Stock Exchange has reportedly submitted a draft rule making it easier for companies to delist on the ChiNext, China's Nasdaq-style board, in a bid to tighten supervision over speculation in securities.
The China Securities Regulatory Commission is considering regulations that will make it easier to delist companies on the ChiNext, the China Securities Journal said yesterday, citing an unidentified official.
The draft was submitted to the country's securities authority in September and the proposed rules may be extended to the main exchanges if they prove successful for the ChiNext, the paper said.
Chinese companies are presently delisted after three consecutive years of losses with trading switched to the over-the-counter market.
The draft rule may cut the three-year period before delisting, which would curb rampant speculation in small-cap firms while resulting in reasonable pricing of ChiNext companies, analysts said.
ChiNext was established to help nurture domestic firms in "emerging and strategic" industries.
ChiNext offers less stringent listing requirements on revenue and profit, enabling entrepreneurs another avenue to raise capital.
But since its debut on October 30, 2009, speculation in ChiNext-listed companies drove up equity prices, leading to concern about potential asset bubbles.
The measure of 100 companies on the ChiNext trades at 65 times earnings, compared with 18.5 for the benchmark Shanghai Composite Index, according to data compiled by Bloomberg News.
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