Listed firms may be allowed to sell shares
2 u) t' E: F7 j The country's regulators will consider allowing listed firms to sell shares as a first step toward lifting its suspension on new IPOs in domestic markets, but no timetable has been set, domestic media reported Monday.
% H( D( |# l- ^# m6 e China is proceeding with a series of market reforms aimed at reviving its shares markets, which remain mired in a four-year slump.
! d; {9 e' }9 {/ p2 D. ]6 V In mid-2005, China suspended new IPOs in domestic markets in an effort to prop up sagging stock prices, weighed down by investor concerns over the share-reform plan to sell more than US$250 billion in State-held shares.
2 S* Q7 K) a2 K4 k "We will look at allowing listed companies to sell shares before approving any new IPOs," the Financial News quoted Shang Fulin, the top securities regulator, as saying at a conference.
- A, _) Y2 G9 G% h1 O) [4 h Reforms in state-held shares need to be built upon solid capital markets, said Shang, adding that the last mile of reforms would be the most difficult.
' D# N, s( ~" J$ c" H9 O% I" O Last month, China scrapped capital gains taxes for foreign stock investors.. _5 V1 I9 l* r+ u! b5 u8 c2 I X
The government is intensifying efforts to lure foreign cash into its main stock market, via a Qualified Foreign Institutional Investor (QFII) scheme that lets overseas firms invest in primary stock and debt markets.
$ W- `9 Y B8 C The index was Asia's worst performing major market benchmark stock index in both 2005 and 2004.
w/ m' B3 D9 Z7 v& _# X While trying to reform inefficient capital markets to give domestic firms another fund-raising option besides banks, China is also trying to enhance corporate transparency and boost profitability.; v+ z( V5 }4 t& P2 [
Shang's comments come after a leading economic official said Saturday that efforts to revive its sickly stock markets are likely to work only if "poor quality" listed companies are eliminated from trading.8 p1 S2 s1 \# T+ J9 Y
"Raising the quality of China's listed companies is the only permanent cure that can ensure public investors' fundamental interests," said Cheng Siwei, a vice chairman of the Standing Committee of the National People's Congress. |