China Small-Cap Stocks Extend January Slump on Liquidity Squeeze
- ChiNext declines on higher funding costs, IPO flood concerns
- Gauge trades at 38 times reported earnings, double CSI 300’s
This article is for subscribers only.
A gauge of China’s small-cap shares slid, extending a monthly retreat, as a liquidity crunch pressured the most speculative part of the nation’s equities.
The ChiNext index fell 1.4 percent in Shenzhen, taking its January loss to 5.1 percent. The measure of mostly technology shares has underperformed the large-cap CSI 300 Index this year as funding costs rose and speculation mounted the regulator will accelerate the pace of initial public offerings, already at a 19-year high -- thereby diverting liquidity from existing shares.