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Share reform wins over market participants
(Xinhua)
Updated: 2006-01-22 09:59
China's ongoing share reform has finally won the support of market participants and people from various sectors, the country's top securities regulator said.
Addressing a seminar on the country's share reform hosted by the Institute of Finance and Banking under the Chinese Academy of Social Sciences on Friday, Shang Fulin, chairman of the China Securities Regulatory Commission, said about one third of domestically listed firms have completed or launched their share reforms.
He said 458 domestically listed firms have completed or are in the process of the share reform, about 34 percent of the total, and their market value accounted for 41 percent.
Stock market participants now have improved confidence this month as prices of most shares on markets went up by about 10 percent, partly because of the reform.
The share reform was launched last April to put an end to a fundamentally flawed capital market system, which has been blamed primarily for the country's bearish share markets in the past four years.
Prior to the reform, about two thirds of shares listed on the Chinese stock markets were not tradable due to the arrangement made 15 years ago to ensure the State maintains majority control over the listed firms, mostly State-owned.
The arrangement proved to be no good for the stock markets to operate as it should have been as two thirds of the shares can not be floated. The ongoing reform will make all those shares tradable through compensations by listed firms or major shareholders for the right to float the shares.
He said China has also moved to improve the corporate governance of the listed firms while pushing forward the reform, which is expected to be completed by the end of this year.
The Chinese government have worked out plans to revitalize its capital market as part of its efforts to improve the country's financial security and promote sustainable social and economic development in the coming decades.
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