The Shanghai Stock Exchange (SSE) on Monday ordered all Special
Treatment (ST) companies to publicize a biweekly report to inform
investors about possible risks, according to a statement on its
Website.
Special Treatment (ST) stocks, which are shares in companies
that have failed to earn profits for two years running or have been
fingered for false accounting, have been darlings of speculative
investors of late because of their capacity for sharp gains.
In an effort to maintain market stability, the SSE has laid down
strict regulations on information released by ST companies.
According to the statement, the companies should reveal
information on stock transfers, non-public offerings, debt
restructuring, business reorganization and capital flows. The
company and all its board members are responsible for the
authenticity, accuracy and integrity of the statement. News
releases are no substitute for formal statements.
The statement said companies which have not completed share
holding reforms also have to provide information about where they
are in the reform process.
An official with the SSE said small investors are vulnerable to
irrational market fluctuations caused by rumors and hype. The
bourse's action was aimed at providing better information on
potential risks.
ST stocks have performed strongly for a week but last Friday
they suffered a sharp setback with 24 shares dropping by the daily
limit of 10 percent.
(Xinhua News Agency May 28, 2007)
