China to complete state-share reforms this year
(AFP)
Updated: 2006-04-24 15:31
China has reiterated its intent to wrap-up state-share reform for its
stockmarkets by the end of the year, amid hopes the changes will give the
struggling bourses a boost.
Shang Fulin, chairman
of the China Securities Regulatory Commission.
[ciic] | "Completing the state share program in
2006 is the primary task and top priority for the reform and development of the
equity market," the China Securities Journal quoted Shang Fulin, chairman of the
China Securities Regulatory Commission, as saying.
"We must push the reform and speed up the process, and take this opportunity
to improve the corporate governance and quality of listed firms."
The reform of the overhang of shares owned by the government began in earnest
in April last year, with companies generally offering up compensation to public
shareholders, usually in the form of free bonus shares.
Of the more than 1,300 listed companies trading on Chinese bourses, about 70
percent of the state groups have put forth reform plans.
Investors are hopeful that the painful reforms will put the securities
markets back on track after four lean years that saw share prices struggle at
eight year lows in 2005.
The government owns about two-thirds of the four trillion yuan (500 billion
dollars) of market capitalization and the flawed structure has been a major
impediment to real growth in the Shanghai and Shenzhen bourses.
Share prices have recovered recently amid investor hopes that new share sales
will soon be restarted after the regulator indicated last week it would do so,
although it failed to fix a date.
Beijing suspended initial public offerings in April last year as it pressed
ahead with its long-planned share reform to prevent a further deterioration in
liquidity.
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