Ningbo Lingjun Investment Management, the third biggest quant fund in China, has apologized to investors and market authorities after it was hit with a three-day trading ban on Tuesday by Shanghai and Shenzhen stock exchanges for dumping stocks on local markets and “disrupting normal market trading”, according to a report by the South China Morning Post, which said this was “the first known case” since the market regulator focused on “trading activities that have perpetuated a three-year market rout”.
Quantitative trading uses computer algorithms and programming to identify and capitalise on trading opportunities, which offer speed advantages of small and medium-sized investors, the paper said.
The Lingjun fund, which has assets of about 60 billion yuan ($8.3 billion), said in a note on its website it was “deeply sorry” for the impact caused by its trading – with computer-generated sell orders – when markets reopened on Monday – and fell as much as 0.9% in the opening hour. It vowed to bolster supervision and “maintain a ‘zero tolerance’ approach towards illegal activities that disrupt normal trading order.”
Read the full report: South China Morning Post.
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