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Share reform wins over market participants
(Xinhua)
Updated: 2006-01-22 09:59
China's ongoing share reform has finally won the support of market
participants and people from various sectors, the country's top securities
regulator said.
Addressing a seminar on the country's share reform hosted by the Institute of
Finance and Banking under the Chinese Academy of Social Sciences on Friday,
Shang Fulin, chairman of the China Securities Regulatory Commission, said about
one third of domestically listed firms have completed or launched their share
reforms.
He said 458 domestically listed firms have completed or are in the process of
the share reform, about 34 percent of the total, and their market value
accounted for 41 percent.
Stock market participants now have improved confidence this month as prices
of most shares on markets went up by about 10 percent, partly because of the
reform.
The share reform was launched last April to put an end to a fundamentally
flawed capital market system, which has been blamed primarily for the country's
bearish share markets in the past four years.
Prior to the reform, about two thirds of shares listed on the Chinese stock
markets were not tradable due to the arrangement made 15 years ago to ensure the
State maintains majority control over the listed firms, mostly State-owned.
The arrangement proved to be no good for the stock markets to operate as it
should have been as two thirds of the shares can not be floated. The ongoing
reform will make all those shares tradable through compensations by listed firms
or major shareholders for the right to float the shares.
He said China has also moved to improve the corporate governance of the
listed firms while pushing forward the reform, which is expected to be completed
by the end of this year.
The Chinese government have worked out plans to revitalize its capital market
as part of its efforts to improve the country's financial security and promote
sustainable social and economic development in the coming
decades.
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