Jan. 9, 2007 (China Knowledge) – Share prices of IPOs will be included into indices only after 11 trading days, according to a new requirement imposed by the Shanghai Stock Exchange (SSE) on Friday. Due to the spike in a newly launched stock, the exchange has imposed this new requirement to prevent an inaccurate movement of the Mainland stock market, which is indicated by composite indexes including the Shanghai Composite Index, SSE New Composite Index, and SSE A-Share Index.

The first IPO to be affected by the new ruling is China Life Insurance, whose trading debut on the Shanghai Stock Exchange has risen more than 96% today. Newly listed companies are not subject to the usual one-day market fluctuation cap of 10% on their debut

SSE estimated that about 415 points of the Shanghai Composite Index's gains last year could be attributed to the artificial lift provided by IPOs of major companies as well as distortions created by non-tradable share reform. The exchange also highlighted the distortion created on BOC's trading debut when the index surged on the strength of the bank's 23% gain despite a drop in most of the rest of the market.