Documents on the trading of previously untradable state-owned shares, which make up two-thirds of China's stock market capitalization, will be released at a proper time, said a senior official Thursday.
"We will wait for a while, until the shareholders calm down, for this will avoid unnecessary fluctuations of the stock market and be conducive to the benefits of all parties concerned," said Li Rongrong, director of the State-owned Assets Supervision and Administration Commission of the State Council (SASAC), during an interview with Xinhua.
Triggered by the strategy paper issued Feb. 1 by the State Council on promoting the stability and development of the country's capital market, China's stocks have been soaring.
The State Council promised in the document to make non-traded shares of listed companies tradable "actively and steadily." Li said SASAC and China Securities Regulatory Commission are cooperating closely on this issue.
As investors in the capital market have become more mature, and more capital has flowed into the market, transactions of untradable shares, which is perhaps the biggest problem weighing down China's capital markets, will not cause sharp fluctuations of the stock market as they used to, Li said.
First, the volume of the untradable shares to be sold will not be very large, for the state must hold at least 51 percent of the shares of certain state-owned enterprises, he explained.
In addition, since the value of the state-owned shares is most likely to increase in the favorable external environment, "why should the SASAC sell the untradable shares in a hurry?"
The method of regulating the transfer of state-owned assets was also enacted Feb. 1. Li said the SASAC could speed up the rectification transactions of state-owned assets, for the document has set the rules for such rectification.
China will treat both domestic and foreign capital "fairly" during the transfer of the state-owned assets, Li said, noting that foreign capital is welcomed as it is "more capable of assets regrouping" and can made China's economy more active.
(People's Daily February 6, 2004)
