Firms in state-shareholding reform
(Xinhua)
Updated: 2006-07-31 17:16 Eight more firms announced on Monday to float
shares previously barred from trading on the stockmarkets.
To date, about 83 percent of Chinese firms listed domestically,numbered
1,119, have completed or are carrying out state-shareholding reform.
That figure indicates the country's one-year-long state-shareholding reform
is drawing to an end as less than 20 percent of the listed firms have yet to
join reform.
The reform, also known as split share structure reform, plus legislative
reforms for listed firms and corporate governance, are part of the measures the
government has taken in the past year to revive the capital market to improve
its financial security.
The split share structure refers to the existence of both tradable shares and
non-tradable shares owned by the state.
To make all their shares tradable, listed companies undergoing reform have to
offer additional shares or funds to private investors as compensation for
potential losses in the value of their portfolios when the publicly-owned shares
hit the market.
The eight companies engage in forestry, science and technology,pharmaceutics,
textile, home appliances, aviation and other industries. Only two of the eight
publicized their reform plans, agreeing to give 2.4 shares per 10 shares to
investors as compensation.
The reform has been viewed by the regulator and investors as vital for the
capital market to function as an open and fair market for both majority and
minority public shareholders.
(For more biz stories, please visit Industry Updates)
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