ChiNext urges confidence

Investors at a securities brokerage in Qingdao city, Shandong province, June 16, 2015. [Photo/IC]

About 28 companies listed on the ChiNext stock market, a Nasdaq-style board of Shenzhen-listed growth enterprises, said in a joint statement on Friday that more measures are necessary to restore investor confidence and ensure market stability, after the benchmark index slumped by about 30 percent in the last two weeks.

The ChiNext index declined by 1.66 percent on Friday to 2,605.28 points, with the barometer dropping by about 33 percent since June 3. The 28 firms are part of the first batch of companies that were listed on the ChiNext in October 2009 when the startup board was launched.

According to the statement published on the website of the China Securities Journal, the authorized website for ChiNext information exposure, the 28 ChiNext-listed companies said measures to strengthen communications with investors and to bolster investor confidence, as well as steps within legal means to protect shareholder interests, like using buybacks and increasing holdings, are essential to protect the stability ofthe stock market. Another 20 companies also released announcements saying that they will join the move to protect the stability of the stock market.

Earlier on Friday, four Chi-Next-listed companies released statements saying that their major shareholders have increased their holdings in a bid to instill confidence and reassure investors.

Amid the wild volatility in the market, it is important for companies to take proper steps to boost information disclosure and regain investor confidence, said Zhang Junzheng, board secretary of ChiNext-listed Boai NKY Pharmaceuticals Ltd.

The three substantial shareholders of the pharmaceutical company increased their holdings in the company by a combined 60,000 shares, spending more than 3 million yuan ($483,438). The majority shareholders plan to increase their holdings further in the next 12 months, the company said.

The decision by the majority shareholders to increase their holdings in the company is a reflection of their continued commitment and confidence in future prospects, said Zhang.