SHANGHAI, April 13 (Reuters) - Fourteen companies in China suspended trading in their shares on Thursday, citing the need to further evaluate the potential impact on businesses from plans to develop the Xiongan New Area, following a surge in the stocks after the scheme was unveiled.
Although the companies, including developer China Fortune Land, port operator Tangshan Port and cement maker BBMG Corp, said they applied voluntarily for the trading halt, some market participants speculated that the hand of the regulator was in fact at work in a bid to cool speculative fever around the “Xiongan concept”.
The new special economic zone was announced last weekend, as China hopes to mimic the rapid growth seen following the establishment of a similar zone in Shenzhen in 1980. The move sparked a frenzy of property trading in the area near Beijing and in stocks believed to benefit from the plan.
At the weekend, Chinese stock exchanges warned several listed companies against misleading investors with bombastic hype around the red-hot theme.
The Shanghai Stock Exchange and Shenzhen Stock Exchange could not be reached immediately for comment.
The 14 companies described their recent share movement as “abnormal” - 13 of them saw their shares jumping to the 10 percent daily limit for six consecutive trading sessions - and vowed to protect investors’ interests. They did not say when their shares would resume trading.
One of the companies, BBMG, said it would “further evaluate and check” its Xiongan-related business, and make a full risk disclosure. Its Hong Kong-traded shares, not subject to the suspension, lost about 1 percent on Thursday.
Some analysts doubted the trading halt would check speculative interest.
“The securities regulator hopes to cool down short-term speculation, but the Xiongan investment theme is still worth chasing in the long run given its prominence,” said Yang Weixiao, analyst at Founder Securities.
He added those 14 stocks could rise further once their shares resume trading. (Reporting by Liu Luoyan, Samuel Shen and John Ruwitch; Editing by Gopakumar Warrier)