June 28 (NBD) -- The Shanghai Composite Index dropped to a record low on Wednesday, and concerns over the higher risks of pledged shares in the A-share market have been aroused recently.

Data show 1,020 Chinese state-held listed companies have pledged a total of 662.68 billion yuan (100.5 billion U.S. dollars) shares, 12 percent of the total pledged A-shares.

Of all these enterprises, 31 companies have pledged more than 30 percent of their total shares.

Nearly 90 percent of the 1,020 enterprises faced a decline in its stock price year to date, and 20 listed companies even saw their share prices halved.

Investors could suffer loss if prices of pledged shares fall to a level that positions must be closed.

But interviewees who engage in the equity pledge business told China Business News that accepting share pledging of state-held companies has relatively lower risks, because these companies will adopt methods such as increasing the amount of pledged shares to fend off risks when their stock prices slide close to the level that positions must be closed.

In industry insiders' views, there exist higher risks in pledges from private listed companies, especially the small ones.

Email: zhanglingxiao@nbd.com.cn