SHANGHAI Stock Exchange has proposed a rise in the daily limit of the movement up or down of Chinese stocks to 20 percent from the current 10 percent to allow prices to reflect market conditions more accurately.

“The current daily limit system has capped stock rises, and has lagged behind the development of the securities market,” the exchange said in a research report jointly compiled with major brokerage Guotai Junan Securities.

That could eventually lead to the abolition of the daily limit, said the report, published in major official financial newspapers.

The Shanghai and Shenzhen stock exchanges adopted the 10-percent daily limit in late 1996 to curb heated trading after an order from the China Securities Regulatory Commission. The exchanges themselves have no right to decide the limits.

China’s stock market began a bull run last year after a four-year depression. The benchmark Shanghai Composite Index jumped 130 percent last year alone.

(SD-Agencies)