What’s new: State-owned Citic Securities Co. Ltd. (600030.SH) (中信证券股份有限公司), China’s top securities brokerage, denied allegations that it was involved in short selling on the domestic stock market on Wednesday, when the benchmark Shanghai Composite Index dropped the most in almost a month.
Hitting back at widespread speculation on the internet that it “took the lead in smashing the market,” Citic Securities issued a statement Thursday, saying it was concerned about “false and untrue information” that was contrary to the facts, seriously damaged the company's reputation, and was not conducive to the orderly and healthy development of the capital markets.
“To protect the company’s legitimate rights, the company reserves the right to take legal action against anyone who publishes or spreads such misinformation,” the statement said.
The Shanghai Composite Index fell 1.26% on Wednesday, pushing the gauge below 3,000 — a threshold widely seen as important to maintain investor confidence.
Some of the financial information contained in Citic Securities’ 2023 annual results released on Tuesday was interpreted by some social media accounts as evidence of the brokerage’s intent to short sell, adding fuel to the speculation.
The background: Short selling has been blamed for contributing to sudden and sharp falls in the stock market this year and the securities regulator has pledged to punish what it described as “malicious” short selling.
Citic Securities’ annual results report showed gains on financial assets and liabilities in 2023 measured at fair value of 3.6 billion yuan ($510.9 million), reversing a loss of 13.7 billion yuan the previous year. Some commentators highlighted this figure and other types of gains noted in the report to back their claims that the brokerage made money from short selling.
Contact reporter Qing Na (qingna@caixin.com) and editor Nerys Avery (nerysavery@caixin.com)
