Measures taken on GEM board speculation

The first batch of 28 companies to be listed on the GEM board in China will take place Friday. The regulator says measures have been taken to avoid risks on the first day of trading.

More than 9 million accounts have been opened across the country. The watchdog says it has taken a series of measures to control trading risks.

Yao Gang, Deputy Chairman of China Securities Regulatory Commission said "We've decided to list the companies in one batch to give investors more choice. It will form a board effect and avoid speculation. The Shenzhen Stock Exchange also set up a supervision department to track the entire GEM board trading performance. Any abnormal and unlawful behavior will be redressed and punished."

In addition, the GEM board will adopt a trading suspension plan the first trading day. If the opening price of a share rises 20 percent or falls 50 percent that day, trading will be halted for 30 minutes. If the opening price of the share rises or falls 80 percent, trading will stop until the final 3 minutes of the day's session.

In order to avoid risks, experts suggest investors analyze listed companies, carefully reading their prospectus and listing bulletins.

Zhang Gang, Analyst of Southwest Securities said "If the rise of the GEM board on its first trading day was small, it would mean it has a soft landing. I think investors should choose to make investments on valuable shares."

The Shenzhen Stock Exchange says it will make continuous efforts to improve the risk-control measures for the GEM board based on the practical situation of the trading.