Listed firms may be allowed to sell shares
# U+ j$ v/ T2 i Y4 J* Z4 m+ N# M 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.
( e& L& I2 x2 @* a# O China is proceeding with a series of market reforms aimed at reviving its shares markets, which remain mired in a four-year slump.
! Z1 \" Q, V: W- C 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$250 billion in State-held shares.
3 [; X& A7 y$ Q- ~; d( H "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.
, N8 o9 n( _* M: J1 ~% K# ?6 j# u" F 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.' A7 F: G5 C4 \/ o& K: f
Last month, China scrapped capital gains taxes for foreign stock investors. X9 ^- |: F) c
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.4 @; B) ^& g" ?$ ~
The index was Asia's worst performing major market benchmark stock index in both 2005 and 2004.
; K: \/ K; [% ?2 K I 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.
^8 f- b2 J+ E$ T, p2 @6 U: \ h- U 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.
" S7 N2 n- [/ q( t: t! e$ g* |) A7 E" _ "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. |