China penny stocks dive after IPO reforms announced

An investor looks at an electronic board showing stock information at a brokerage house in Shenyang, Liaoning province. [Photo/Agencies]

HONG KONG - Chinese penny stocks slumped on Monday morning, as investors trimmed their exposure from a sector that has outperformed this year after China's securities regulator mapped out plans to reform the initial public offering process.

The brokerage sector rallied on hopes that offerings would resume in the new year after the China Securities Regulatory Commission predicted that about 50 companies will be ready to complete preparatory listing work by then.

At 0138 GMT, the Nasdaq-style ChiNext Composite Index of most technology start-ups listed in Shenzhen was down 5.9 percent. Before Monday, it was up more than 80 percent on the year, far outperforming the more than 3 percent loss for the large cap focused CSI300.

The CSI300 of the leading Shanghai and Shenzhen A-share listings was down 0.5 percent, while the Shanghai Composite Index slid 0.7 percent.

 

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