Trading of 33 Hong Kong listed stocks has been halted on Friday after a number of firms missed deadline to report annual results adding more uncertainty to the market.
Distressed Chinese developers including Sunac China Holdings Ltd and Shimao Group Holdings Ltd were among the stocks suspended.
China Aoyuan Group Ltd said publishing unaudited could “potentially” be misleading to shareholders.
The trading halts comes the Hang Seng Index dipped 10-year low this month.
Earlier Beijing vowed stability in an attempt to restore investor’s confidence.
This years earnings season had been expected to the worst in a decade for Chinese developers amid credit crunch amid credit crunch and failure to meet regulatory guidelines. Uncertainty to meet financial transparency could also add to further credit ratings downgrades.
“It is an open secret that auditors adopt very strict requirements for Chinese developers’ audit work this year due to the sector’s liquidity issues and default problems,” said Raymond Cheng, the head of China/Hong Kong research at CGS-CIMB Securities Ltd as reported by Bloomberg.
Still, the earnings delays “could hurt improving market sentiment from supportive policy”.
According to exchange rules, trading for company’s shares would be halted if it doesn’t report results of three moths after the fiscal year ends. However, due to Covid-19-related delays, firms have been allowed to submit unaudited figures by March 31 and file the audited version by April 30 to avoid suspension.
Of the total suspensions, 32 were related to a failure to meet the earnings deadline, according to an exchange spokesperson who did not specify why the other company was halted. Some 192 firms filed unaudited results by the deadline, compared with 27 in 2021 and about 380 in 2020 when the Covid-19 pandemic first emerged. A total of 1,860 listed companies were slated to report by end-March.
The exchange will “engage with the relevant issuers to support their full compliance with the listing rules” and to “keep the period of any trading suspensions to as short as is reasonably possible”, the spokesperson said in an emailed statement to Bloomberg.
The Hang Seng Index fell as much as 2% on Friday before paring losses to 0.10%.
