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1st State-share sale expected in May

(Shenzhen Daily)
Updated: 2005-03-23 14:38

The government was likely to give approval for three to five listed companies to trade non-tradeable State shares as early as May under a pilot scheme, the South China Morning Post reported, citing a government-approved consultancy firm.

Realize Consulting, a consultancy approved by China Securities Regulatory Commission, drew the "loose conclusion" after discussions with government departments while preparing a survey, the newspaper reported.

"This is our assumption," the newspaper quoted Zheng Peimin, chairman of Realize Consulting, as saying.

Stock market watchers in China have said that time has finally arrived for the government to deal with the so-called State share problem, which has long weighed on domestic share markets.

State shares, which account for about two-thirds of China's total market capitalization, are the government's stakes in a slew of listed State-run companies and are not allowed to trade.

The unresolved status of State shares has cast a shadow over the market and jitters that the government's sell-down of State shares would flood the market with excess shares and squeeze liquidity have helped drag down the markets.

The Shanghai and Shenzhen markets dropped 44 percent and 52 percent respectively since June 2001, when the government first announced a plan to sell 10 percent of State shares in newly-listed firms.

Realize Consulting estimated that reform would be at an "experimental stage" over the next two years.