Chinese companies trading in Shenzhen, the country’s technology hub, have been underperforming those listed in Shanghai this year, a trend that underscores the delisting risk faced by smaller companies and investors’ penchant for big industry leaders amid a challenging macro environment.
The Shenzhen Composite Index, which is largely made up of small-capitalisation stocks including tech start-ups on the ChiNext board, has dropped more than 7 per cent since the start of the year. That compares with a 1.9 per cent gain in the Shanghai Composite Index, which is dominated by more established companies in the traditional industries.
The divergence in performance comes as the stock market regulator, under the leadership of new chief Wu Qing, has encouraged more dividend payouts from listed companies and pledged to weed out companies that fail to meet strict new listing criteria as part of measures to revive confidence among investors….
