BEIJING (Reuters) - China’s maiden “art stock exchange” has halted trade in its top two paintings after their share prices soared 1,700 percent and ignited concerns that a new bubble was bursting.
Just two months after the Tianjin Cultural Artwork Exchange listed shares in two Chinese paintings, the bourse said it was pulling the paintings from trade to “reduce investment risks and protect investor rights.”
Wild asset price swings are not uncommon in China, where markets are often dominated by ordinary people who have few viable investment channels and earn little, if any, interest on bank deposits.
In the past three years alone, items as varied as garlic, mung beans and ant-based aphrodisiacs have all experienced investment frenzies.
The Chinese art market was also seen by many critics as a bubble in 2008 when auction prices soared. But the boom in art shares was something entirely new.
The Tianjin art exchange, which opened in January, operates by listing works of art and then offering investors fractional ownership.
The two paintings yanked from trade were Roaring Yellow River and the Autumn in Fortress.
Exchange data showed that on its last day of trade this week, shares in Roaring Yellow River traded at 17.2 yuan ($2.62), compared with their issue price of 1 yuan.
That valued the canvas by modern Chinese painter Bai Gengyan at 103 million yuan ($15.7 million), nearly 52 times the highest price that Bai’s paintings had ever fetched in a public auction.
But it is not the end of the road for the Tianjin art exchange, which says on its website that its goals are to promote “financial innovation” and “broaden channels for the public to participate in high-end artwork investment.”
It listed seven new paintings and a diamond on March 11. They have gone up by 15 percent — the maximum daily gain according to exchange rules — in every trading day since then.
Reporting by Zhou Xin and Koh Gui Qing; Editing by Simon Rabinovitch and Ken Wills