ST stocks gain as warnings lifted

Most special treatment (ST) shares rallied Thursday after news emerged that five Shanghai-listed companies had received regulatory approval from the exchange to have risk warnings removed from their stocks.

The five companies - including Beihai Gofar Marine Biological Industry Co, CRED Holding Co, Jiangsu Gaochun Ceramics Co, Xinjiang Korla Pear Co and Shaanxi Qinling Cement (Group) Co - were suspended from the exchange Thursday, but are set to resume trading Friday without ST marks, these companies announced in filings with the Shanghai Stock Exchange (SSE) Thursday.

Since July 7, when the SSE lowered requirements for listed firms to have their ST status lifted as part of its revised listing rules for 2012, there has been a marked increase in the number of Shanghai-listed companies that have received approval from the exchange to trade without this risk warning.

There are two main reasons behind this phenomenon, according to a Securities Times report Thursday. Firstly, many of the companies that had been put into the ST category no longer deserved this distinction according to the SSE's new criteria. Secondly, regulators at the SSE appear to have sped up their approval efficiency in recent days.

The SSE was not immediately available to comment on the matter Thursday.

Meanwhile, the ST sector outperformed the mainland stock markets Thursday after swelling 3.93 percent, with about 40 ST shares surging to the daily limit of 5 percent. Moreover, Thursday was the third consecutive trading day that saw the sector soar thanks to the lifting of multiple risk warnings. Tuesday alone witnessed four companies shake off their ST marks, while two companies were given the exchange's nod to trade without warning Wednesday, according to data from the SSE.

"Market players interpreted this news as a positive sign for the whole sector and jacked up ST share prices merely based on speculation," Li Bo, chief analyst from GF Securities, told the Global Times.