Steep Decline in China's B-shares Yesterday Afternoon

After a calm morning of trading, the Shanghai B-share market, a small US-dollar denominated board open to trading by foreigner investors, dropped dramatically yesterday afternoon, at one point the B-share index was down 7.52%, before regaining a little to close down 5.33% on the previous day's close. This is the largest single day drop since Nov 12, 2010. Only 4 of the total 108 B-shares traded on both the Shenzhen and Shanghai boards rose yesterday. 21st Century Business Herald quoted Dai Lei, an analyst with Avic Securities, as saying that the sudden drop was "very odd." Shanghai Securities News reported that the sudden drop was related to rumors that the government would impose a capital gains levy on the foreign-currency denominated stock.

Source
21st Century Business Herald

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