A minimum of 12 Chinese listed companies have issued statements this week playing down crypto links to blockchain technology amidst signs that regulators are trying to limit the kind of speculative surges seen in other markets.
Thursday, Hangzhou Sunyard System Engineering Co. declared that it’s not involved in blockchain platforms, even though it owns a stake in a blockchain company. Likewise, Shenzhen Forms Syntron Information Co. said on Wednesday that a blockchain project it’s currently undertaking has “very little contribution” to its earnings and there’s “great uncertainty” on its future impact. Both firms said exchange operators had asked them to remind investors of the risks involve.
An emerging enthusiasm for crypto-related stocks is the latest challenge to China’s regulators, who’ve been keen to stamp out any signs of mania since an equity bubble burst in 2015. Hangzhou Sunyard System Engineering Co. jumped by the 10% daily limit before its statement, while Shenzhen Forms Syntron has rallied 32% this year.
Wang Chen, a Shanghai-based partner with XuFunds Investment Management Co said: “It’s become somewhat a routine now that regulators will take measures or ask listed companies to make such clarifications whenever there’s a great deal of speculative trades in the market.” He added that “The regulators don’t want crypto-driven ‘stir-frying’ of stocks to develop further.”
Monday, Dalian Yi Qiao Sea Cucumber Co. said a wholly-owned unit has yet to receive any payments for its services that use blockchain, so there’s “great uncertainty” over blockchain’s possible contribution to the company’s operations. Yi Qiao has jumped 58% this year.
China’s crypto frenzy is still relatively contained compared to the eye-watering gains seen elsewhere due to daily limits on stock moves – usually 10%. Companies in the U.S., from makers of juice to sports bras, have seen their shares surge after announcing cryptocurrency ventures.
Photography and film giant Eastman Kodak Co. has jumped on the bandwagon. The company’s shares more than doubled after it said Tuesday it will start an offering soon to sell its own cryptocurrency KODAKCoin. Trading volume in the stock exceeded even the biggest index exchange-traded funds in US markets.
China is only taking a guarded approach to betting on digital currencies and Blockchain technology. According to Dai Ming, a Shanghai-based fund manager with Hengsheng Asset Management Co.: “Blockchain technology isn’t mature enough to contribute meaningfully to profits and regulators don’t want any speculation on so-called concept stocks.”
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