Lucky in business? It may just depend on the stock codes!

14:41, October 26, 2009      

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Superstition can play as much a role in the stock market as it does in a casino, and it's playing its part in China's long-awaited NASDAQ-style growth enterprise board (GEB).

One area where it features prominently is in the listing number of companies, particularly in cultures such as China, which attaches great importance to numbers.

According to Chinese traditional numerology, 6, 8 and 9 mean, respectively, "all right", "fortune" and "long lasting".

Companies that have already held initial public offerings and that have been fortunate enough to be allocated a lucky number either in Shanghai or Shenzhen include China State Construction Engineering Corp (601668), Shenzhen Development Bank Co (000001), Emei Shan Tourism Company Ltd (000888) and Sanjiu Medical & Pharmaceutical Co (000999).

Shenzhen Development Bank has risen 2,102 percent ever since its listing in 1991. Emei Shan Tourism has risen 96 percent since it listed in 1997 and Sanjiu has climbed 41 percent since it listed in 2000. However, CSCEC's share price has dropped about 27 percent since it listed in July.

Now, speculators are being drawn to the first 10 companies to be listed on the GEB.

These companies have all received the prefix 300. Qingdao Tgood Electric Co was the first to pass the regulators' primary IPO review procedures, so it became the lucky dog that got the code of 300001, marking it down in history as the first company on China's long-awaited GEB.

The market regulator vetted applications from about 150 companies that intended to list. An initial 10 were chosen.

"These companies had shown great interest in getting the code 300001. The code number was based on the sequence by which the regulator reviewed applications," said Li Jianyong, president of Guangfa Securities.

Li Daxiao, director of research at Yingda Securities, said the authorities were aware of the possible market distortion caused by the new listings. "To avoid hot speculation on one GEB company, the regulators tried to give the green light to companies in batches. For many companies listed on the main board, they got the code from the bourse in sequence."

The number 4 is considered unlucky in Chinese tradition because it sounds like the word for death. So far, no company has been allocated the code ending with 444, but some investors have joked in forums that it would be very suitable for funeral companies.

Few serious investors believe codes can affect a business' performance. For example, Wuliangye Yibin Co, one of the country's top liquor makers, was temporarily suspended from trading for violating disclosure rules. Its code is the comparatively auspicious 000858.

Source:China Daily
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