Fractional trading in Chinese paintings suspended over 'bubble' fears
Reuters reports that China's maiden "art stock exchange" has stopped selling fractional ownership in its top two paintings after their share prices soared 1,700 per cent and ignited concerns that a new bubble was bursting.
Two months after the Tianjin Cultural Artwork Exchange listed shares in two Chinese paintings, the bourse has suspended trading to "reduce investment risks and protect investor rights".
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 is a new phenomenon, according to Reuters.
The Tianjin art exchange, which opened in January, operates by listing works of art and then offering investors fractional ownership.
The withdrawn paintings were called Roaring Yellow River and Autumn in Fortress.
On its last day of trade, shares in Roaring Yellow River traded at 17.2 yuan (US$2.62), compared with their issue price of 1 yuan. That valued the painting by modern Chinese painter Bai Gengyan (pictured) at 103 million yuan (US$15.7 million), nearly 52 times the highest price that Bai's paintings have ever fetched in a public auction.
However, the Tianjin art exchange listed seven new paintings and a diamond on March 11. They have gone up by 15 per cent -- the maximum daily gain according to exchange rules -- in every trading day since then.