With the continuous development of my country's capital market, the GEM has gradually become a sector that attracts much attention. In the GEM, the price limit is an extremely important issue. So how are these rules formulated, and what is their impact on the GEM?
First, let’s take a look at how the rules are drawn up. In my country's stock market, price limit has always been a relatively common method. The limit on the rise and fall of the GEM is 20%, which means that the maximum increase is 20% and the maximum decline is 20%.
But what impact does the price limit have on investors and the market? Some people believe that price limits can protect the interests of investors and prevent significant fluctuations in stock prices. At the same time, for newly listed GEM companies, the price limit can also make the fluctuations in stock prices gradually stabilize, giving investors more time to consider. However, there are also opinions that the price limit will impose restrictions on the market, which will make the market lack flexibility and resilience, which is not conducive to market development and optimization.
In addition, there are some issues worth noting.
First of all, due to the particularity of the GEM market, the price limit is generally more obvious in the early stage of listing. This also means that in the early stages of the listing of new shares, the fluctuations in their stock prices are greatly restricted. If there is a discrepancy with market expectations or if profits remain high, the stock price will rise and fall sharply in a short period of time, causing market instability.
Secondly, price limits will affect the liquidity of stocks. Once the stock reaches the limit of rise and fall, many investors will lose the opportunity to buy or sell, which will also have a certain impact on capital operations and flows.
In addition, the price limit may also lead to greater differentiation in the capital market, which will have a negative impact on the overall impact of the capital market. For example, due to price restrictions, the trading volume and liquidity of some stocks will be greatly affected, while some stocks that are not subject to restrictions are more likely to attract the influx of "hot money" from investors, which will also lead to excessive instability in stock prices. firm. This will lead to market differentiation and uneven capital flows, which will put pressure on the entire market.
Generally speaking, the price limit rules play an important role in the GEM in the stock market. Whether it is to protect the interests of investors or to make the market unstable and stable, everything needs to be considered. However, this rule also has some restrictions and influences, which require time to pay attention to.