Quantitative giant Lingjun apologizes after 2.5 billion shares sold in first minute, net buying throughout the day, insists on long Chinese stock market
Ningbo Lingjun Investment Management Partnership (Limited Partnership), a quantitative investment giant, was in the crosshairs of the Shanghai and Shenzhen Stock Exchanges after 2.5 billion yuan worth of stocks were sold in the first minute of trading on February 19th. This prompted the exchanges to initiate disciplinary proceedings and impose trading restrictions on the company.
According to the Shanghai Stock Exchange, multiple securities accounts under Ningbo Lingjun automatically generated trading instructions through computer programs in a short timeframe resulting in a rapid decline in the Shanghai Composite Index. The Shenzhen Stock Exchange also highlighted that Ningbo Lingjun’s trading behavior has affected the normal market order and constituted abnormal trading.
Amid this, the company issued an announcement expressing its firm compliance with the measures imposed by the exchanges. Ningbo Lingjun stated that it had conducted a thorough review of its internal processes and expressed deep introspection and regret for the negative impact caused by the large volume of trades in the initial minute of trading on February 19th.
The company also emphasized its long-term confidence in the Chinese stock market. It stated that its stock positions have always been close to full and that it is resolutely committed to the long-term growth and potential of the market.
In response to the disciplinary actions, the company pledged to enhance its compliance awareness and improve its trading models to ensure the smooth and balanced progression of transactions.
Ningbo Lingjun, established in June 2014, is a well-known quantitative private equity giant in China with an asset management scale that is expected to exceed 60 billion yuan by 2022. The company’s investors include Ningbo Hengxun Venture Capital Partnership (Limited Partnership), Ningbo Meishan Bonded Port Area Yayuan Investment Management Co., Ltd., and Ningbo Xishi Investment Management Co., Ltd.
The imposing of disciplinary action on Ningbo Lingjun highlights the commitment of the exchanges and regulatory authorities to maintain market stability and uphold the interests of investors. As the situation unfolds, it will be crucial for the company to demonstrate its commitment to compliance and restoring market confidence.