SOME executives and large shareholders of China’s listed firms are cashing out of their companies’ shares after an explosive start to the year for the nation’s equity market, raising doubts over the sustainability of the rally.

ZTE Corp.’s Shenzhen-listed shares had soared 59 percent this year, until the telecom equipment maker said Tuesday its controlling shareholder planned to cut stock and buy units in an exchange-traded fund. ZTE slumped 7.8 percent Wednesday, its biggest loss in five months. The stock fell a further 1.50 percent Thursday.

Hunan New Wellful Co.’s year-to-date advance has been trimmed to 177 percent after the pig farmer said last Monday its second-biggest shareholder planned to dump as much as its entire 16 percent stake. Wangsu Science & Technology Co. also said last Monday that four shareholders planned to sell up to 6.4 percent of its total shares. The stock surged 121 percent this year through Friday. It has dropped 19 percent last week.

Panel makers Tianma Microelectronics Co. and BOE Technology Group Co. are among other hot stocks to announce similar sales. Tianma is one of the year’s top performers on the MSCI Asia Pacific Index, climbing 74 percent even after a 13 percent loss last week.

The ChiNext gauge of technology and small-cap shares, a particularly volatile index, suffered its biggest loss since October Wednesday, tumbling 4.5 percent in the wake of insider selling announcements.

“This will certainly hurt the market,” Ken Chen, a Shanghai-based analyst with KGI Securities Co., said of insider selling. “Some retail money will run for the exit after the shareholders’ plans to cut stakes, and that will deplete the upward momentum in stocks.”

The ChiNext still boasts a world-beating gain of 31 percent this year, thanks to more supportive policies.

“Many shareholders of listed firms are cash-strapped,” said Shen Zhengyang, a Shanghai-based strategist with Northeast Securities Co. “Now with the stock gains, they can finally cut their holdings and use the money to repay loans.” (SD-Agencies)