Reform sweeps over 70% of stock market
(Xinhua)
Updated: 2006-04-24 14:58
China's share reform now accounts for more than 70 percent of the market
value of the country's two bourses, the Shanghai Securities News reported on
Monday.
The Shanghai and Shenzhen stock exchanges have announced another 35 companies
starting the split share structure reform, bringing the total to 868,
or 64.58 percent of listed firms.
This is the 30th round of reforms since the government launched the
controversial scheme in April last year.
The split share structure -- referring to the existence of both
publicly-owned tradeable shares and a large volume of state-owned non-tradeable
shares -- was regarded as a major factor leading to the last four years of
bearish performance.
To make all their shares tradeable, listed companies must offer additional
shares or funds to private investors as compensation for potential losses in
their folios when the non-tradeable shares hit the market.
The 35 listed companies have agreed to an extra 2.58 shares for every 10 held
by private investors as compensation, slightly lower than the level of the
previous round, the newspaper said.
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