Sifang Technology opened at the 10% limit down on Sept. 3 at 13.91 yuan, down
10.03%. Sept. 3 is the payment date for the original-shareholder priority
subscription of the company's convertible bond; market participants say funds
have been pulled from the underlying equity to participate in the priority
subscription and payment, creating selling pressure. Sifang said under its
convertible bond rules investors had to hold the stock on Sept. 2 to qualify for
the priority allotment; they may sell shares today and still complete the
priority subscription and payment. The company noted similar limit-down moves
have been common in prior convertible bond issues.
