2006 timetable set for State-share reform
(Shenzhen Daily/Agencies)
Updated: 2006-02-14 14:20

The government aims to complete basic share-reform tasks this year as part of work to develop and reform the overall capital market, an editorial published in the central bank-backed Financial News said yesterday.

The editorial was part of a series in the newspaper discussing work to be carried out in the financial sector in 2006.

Listed companies on mainland exchanges are now carrying out reforms to transform their nontradable shares into tradable shares. Nontradable shares previously made up roughly two-thirds of the country's stock market capitalization, distorting share valuations and hindering the development of the stock market.

Where necessary, the government should give guidance to companies to ensure reform plans benefit holders of both tradable and nontradable shares, which will help the stability of share prices after the reform process, the editorial said.

The editorial said securities regulators must focus on innovation this year to build a broader and deeper capital market.

Large, high-quality companies will be encouraged to list domestically, it said.

China will work toward a more market-oriented system, both for initial public offerings and share offerings of fully tradable stock, it said.

The editorial signaled policymakers' commitment to financial reform, but didn't elaborate on capital market development or say whether the completion of the State-share reform signaled the resumption of new share offerings.