Exchanges suspend trading on 34 stock accounts
CITIC Securities denied a rumor on Sunday that it was working with a global hedge fund to short A shares, the latest development after China's securities regulator had restricted specific stock accounts from trading.
The mainland stock markets finished July with losses for the second consecutive month, leaving investors wondering whether there was any non-market factor behind the recent plunge.
The Shanghai Composite Index fell 1.13 percent or 42.04 points to close Friday at 3,663.73 points, finishing the week down 10 percent. On a monthly basis, the Shanghai index plunged 14.34 percent, its biggest monthly loss in nearly six years.
The Shenzhen Component Index slipped 0.17 percent or 21.67 points to close at 12,374.25 points, down 8.46 percent week-on-week and 13.70 percent month-on-month.
Total turnover on the two bourses Friday reached 878 billion yuan ($141.40 billion), down from 1.16 trillion yuan on Thursday.
The CIS 300 Index of the biggest companies traded in Shanghai and Shenzhen gained 0.03 percent or 1.29 points to end at 3,816.70 points, but still finished down 8.61 percent for the week. The index was down 14.67 percent month-on-month.
ChiNext, the country's NASDAQ-style board for high-tech and emerging start-ups, fell 0.83 percent or 21.35 points to 2,539.84 points, losing 12.35 percent for the week and 11.15 percent for the month.
The Shanghai Stock Exchange and the Shenzhen Stock Exchange announced on their websites on Friday and Saturday that 34 stock accounts would be restricted from trading for three months. The accounts were suspended for suspicious "trading behavior," including abnormally frequent bids and bid cancellations that may have affected securities prices and investor decision making.
In particular, media reports said Saturday that global hedge fund Citadel Global Trading and a subsidiary of CITIC Securities are both shareholders of the Shanghai-based trading company that holds one of the 34 suspended accounts.
The report was quickly denied by CITIC Securities on Sunday, which claimed that its subsidiary had already transferred its stake in that trading company in November 2014.
Stock markets again saw wild swing last week, which analysts generally attributed to the elevated valuations and shaky confidence. Investor sentiment remains vulnerable despite the unprecedented series of support measures rolled out by the central government in July.
According to data from stock information portal 10jqka.com.cn, a total of 881 mainland listed companies bought in 64.1 billion yuan in shares in July, double that of the previous month.
Because it is rare to see three consecutive months of losses in the A-share markets, analysts generally expect a rebound in the coming month.
