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Share reform extended to whole market

www.chinanews.cn 2005-08-25 09:52:12

(Source: China Daily)

Aug. 25 - The authorities announced yesterday that the share merger
reform would be extended to the whole market, sparking a smart rally on
the Shanghai and Shenzhen bourses.
Five State departments announced guidelines pushing the reform process
ahead since the pilot projects on share mergers had proved successful and
were well received by the markets.
This prepared the ground for expanding the reform, according to the
circular, which outlines the general direction of the process.
The China Securities Regulatory Commission encourages all mainland-listed
companies to choose a suitable time to merge their tradable and
non-tradable shares, the circular said.
Listed companies which complete the merger would be given priority to
raise new capital; and all shares in future initial public offerings will
be tradable.
However, details of the reform procedures have yet to be revealed to the
companies, said Hua Sheng, a well-known economist based in Beijing.
The circular says partners of joint ventures would enjoy the same
favourable policies as before even if their share percentage in the
company changed due to the reform.
The State will retain controlling shares in pivotal industries vital to
national economy or national security, the circular said, because "the
reform is to solve the systemic problems of China's stock market rather
than to sell State shares".

          ��Share reform to end without third round
      &nb

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