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The over-the-counter stock market will extend its trading time as part of a service upgrade, the China Securities Association said Tuesday.
The self-regulation association for China's 100-plus brokerage houses said companies with positive net assets will be traded on Tuesday and Thursday as well as the present Monday, Wednesday and Friday.
Trading in negative-net-asset companies will continue to be limited.
The brokers' association said the change is being made to comply with the China Securities Regulatory Commission's desire for better service on the third board.
But it did not say when Tuesday and Thursday trading will start, and no official was willing to speak for the record.
The association also pledged to simplify procedures for switching delisted companies to the OTC market.
Only nine companies so far are traded over the counter in China. One was ejected from the Shanghai Stock Exchange: Shanghai Narcissus Electric Appliance Co. Ltd., delisted in April 2001 for failing profitability criteria.
Food processor Guangdong Kingman Group Co. Ltd. and the diversified Shenzhen Zhonghao Group Co. Ltd. applied for OTC status after being delisted at the beginning of the year.
"Service has to be improved in the OTC market, since more companies are going to be kicked off the main board now that the securities regulator has issued more stringent rules for listed companies," said Wu Jie, a dealer for New China Securities Co. Ltd.
Wu predicted that the longer trading hours would attract fresh capital to OTC companies with relatively good earnings records.
About 950,000 investors have registered with the OTC market, which has racked up total trading volume of 2.1 billion yuan (US$253 million).
The market was set up in July 2001 to accommodate companies that were expelled from the main board or that used to be listed on the now-defunct Securities Trading Automated Quotations network and the National Electronic Trading system.
Started in the early 1990s, STAQ and NET were designed as trial homes for companies bumped from the Shanghai and Shenzhen bourses.
They were closed four years ago after many individual investors were found to have skirted a rule limiting trading to corporate investors.
Six brokerages have been chosen by the securities regulator to coordinate corporate disclosures, equity clearing and registration for the over-the-counter market.
(Shanghai Daily August 21, 2002)
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