Listed firms may be allowed to sell shares8 O. U; ?8 m- p1 s1 k7 l6 y8 Y6 x
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. China is proceeding with a series of market reforms aimed at reviving its shares markets, which remain mired in a four-year slump.
' b- O" ~1 ]# E% I 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$250 billion in State-held shares.: I" L1 w( l6 ]$ J8 n
"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.$ I2 Y1 w- m+ x( v3 \4 z; v
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.4 N: }% E4 e& v% d! v( L
Last month, China scrapped capital gains taxes for foreign stock investors.3 |( ]- @8 G; E# {0 c7 F/ ]. Y
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.
' v; O' n2 a! q6 F" j" `2 U0 W$ q The index was Asia's worst performing major market benchmark stock index in both 2005 and 2004.: E/ ]0 g' r' `$ e) _5 J1 b; s& s
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.1 _/ x6 R0 [" z; @
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.
) E8 s/ Q' L+ c "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. |