|
Foreign investors may hold tradable shares
(Xinhua)
Updated: 2005-10-25 09:47
Overseas investors with non-tradable Chinese shares are expected to be
allowed to hold tradable shares as strategic investors, China Securities Journal
reported Monday, citing sources it described as "authoritative".
The newspaper said government departments are studying and formulating
regulations on the holding of tradable shares by the overseas investors.
To date, overseas investors are allowed to hold tradable shares only through
qualified institutional foreign investors (QIFF).
The newspaper said China is going to step up its pace of share reform in the
near future and initial public offerings will be resumed after the reform of all
of the country's domestically listed firms.
After years of debate, China decided to end the split share structure, which
was the major cause of China's stock market stagnation.
China's Securities Regulatory Commission said earlier this year the split
share structure has been a barrier to the regulated development of the capital
market and basic reform in state assets management.
Split share structure refers to the existence of a large volumeof
non-tradable state-owned and legal personal shares.
Currently, only about one-third of the shares in domestically listed firms
float on the markets. The structure puts public investors in a worse position
than the actual controllers in making corporate policies and disposing of the
firms' profits and assets.
Under current share reforms, listed firms or majority stock holders pay
compensation to minority stock holders in exchange for the right to float their
mass untradable shares on the market.
Minority stock holders were given about three shares in compensation for very
10 shares they have.
|
