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Regulators attempt to soothe stock investors

(Xinhua)
Updated: 2005-08-26 11:30

China's listed firms must not harm the interest of local or foreign investors if they choose to join the program to float State-owned shares, regulators said Thursday in a move to reassure the investors.

Such firms must not infringe on the rights of owners of "H shares" -- stock in mainland firms listed in Hong Kong -- and B shares, regulators were cited as saying a day after barring such stockholders from having a say on individual firms' float plans.

But official comments published in major domestic newspapers stopped short of laying down rules to enforce those principles. B shares are stock in which foreigners can invest freely.

On Wednesday, China threw open a plan to float State holdings in excess of US$200 billion to all 1,400 of its listed companies, taking a decisive and long-awaited step to remove a decade-old market overhang that has depressed stock values.

Local investors, which had fled the market since the start of the year, pushed the benchmark index up 1.5 percent Wednesday in a seemingly positive response.

Until then, the scheme had encompassed 46 trial firms such as top mill Baoshan Iron & Steel Co Ltd and Three Gorges Dam joint-operator Yangtze Electric Power Co Ltd.

But in a move that might anger foreign investors, regulators decreed that only holders of A shares -- yuan-denominated stock listed in Shanghai or Shenzhen -- could discuss and vote on State-share reforms.