Beijing Stock Exchange asks major shareholders to refrain from selling
What's the story
China's Beijing Stock Exchange has put an unofficial policy in place that stops major shareholders of listed companies from selling their stocks, according to Reuters.
This move comes as a response to worries that such sales could negatively impact the ongoing market rally.
A "major shareholder" is someone who owns at least a 5% stake in a company, and they must file a public report with the appropriate stock exchange to sell shares.
Details
New policy could help maintain upward momentum
The Beijing Stock Exchange has been rejecting these filings, as per Reuters. It's uncertain how long this policy will last.
This unwritten rule, known as window guidance, was supposedly put in place out of the fear that a surge in stake-selling "could dull market excitement."
The so-called window guidance, where directions are made orally without written documents, could potentially help maintain the upward trend for the Beijing Stock Exchange 50 Index.
What Next?
Index rose 21% last week
Neither the Beijing Stock Exchange nor the China Securities Regulatory Commission immediately replied to Reuters's requests for comment.
On Monday morning, the index saw a 10% increase, following a 21% rise last week, as a result of government efforts to rejuvenate the once-stagnant Beijing market. This month itself, it has surged as much as 46%.
As of the latest update, the index traded at 1,100.84, marking a gain of 111.86 points or 11.31% from its last closing value.