Stock market regulators began in June to restrict the number of additional share offers in order to halt a slide in stock prices, South China Morning Post said. In the first five months of this year, 17 companies launched additional share offers and in May another 40 were waiting to do so.
Analysts said that this had created a scrip overhang, a major cause of the sharp falls in share prices since the start of the year, with Shanghai A-shares losing 45 per cent of their value and Shenzhen A-shares 54 per cent. After the chairman of the Shanghai Stock Exchange was quoted by Securities Times as saying that the slowdown was in force, shares on both exchanges recorded their steepest rises in recent months.