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Shares of Guotai Junan International (1788) once surged around 90 percent on Thursday after nearly tripling on Wednesday following a regulatory approval to provide virtual asset dealing services, raising concerns that the rapid inflow and outflow of speculative funds could lead to an A-share-like volatile trading environment.

Most of the gain was pared later in the morning trade on Thursday, but the stock was still traded 13 percent higher at noon.

It closed with a 198 percent increase on Wednesday, setting a record single-day trading volume of HK$16.39 billion for the stock. It also topped the list of net inflows through the Stock Connect, with HK$1.66 billion in northbound funds.

The securities firm said on Wednesday that its Hong Kong unit won the nod from the Securities and Futures Commission to provide virtual asset dealing services, making it the first state-owned brokerage to receive the green light.

That sparked speculations that China, which has banned virtually every cryptocurrency-related activity, may ease its curb, and that Guotai Junan’s newly licensed business may tap into the mainland market via its parent Guotai Haitong Securities (2611).

Currently, market activity surrounding “license stocks” is largely speculative, and it is hard to predict their future price levels, said Jason Chan, senior investment strategist at Bank of East Asia (0023).

While the new license allows the firm to provide crypto trading within Hong Kong, it might take years for the regulators to lift the ban on such activities in the mainland, Chan said.

He also warned of intense competition in the area, saying that the licensing news alone is unlikely to support the company’s fundamental value over the long ter

Guotai Junan stock surges on virtual asset services approval