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China will grant favorable policies to those listed companies having completed split share reform, as well as the regions that speed up the reform process, according to a senior securities regulatory official.
China will accelerate the implementation of split share reform policies on the basis of keeping the stock market stable, taking the share market value of state-owned enterprises (SOEs) as an assessment standard of their operational performances, Chairman Shang Fulin of the China Securities Regulatory Commission (CSRC) said in Beijing at a meeting on Tuesday.
China this year launched reforms to end the split share structure, which was seen as the major problem in China's stagnant stock market as a large part of the shares were not allowed to be traded on the market.
Due to the split share structure, many SOE nontradable shareholders do not care much about their share prices, which are only a concern of public investors.
Up to now only a small number of listed companies in China have completed reforms and made all their shares tradable through giving compensation to public investors. It is said that many companies and regions are reluctant to start such a reform, and the slow reform process has made the stock index linger at low levels recently.
Research focus should be put on transaction systems, financing conditions, merger and derivative creation in the all-share-tradable period, Shang said.
Support should be given to those companies having completed share reforms, and an all-out effort should be made to prepare for the implementation of the newly-passed Securities Law and Corporation Law so as to improve listed companies' quality and safeguard public investors' interests, he said.
(Xinhua News Agency November 17, 2005)
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