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.
Thanks to Ge Jing for this link.
Ge Jing’ s email:
The article is about the Share Merger Reform of China’s stock market. Despite a prosperous economy, China’s stock market has been declining dramatically from 2000 points to 1000 points in the past 4 years. The seperation between state-owned non-tradable share and tradable share was considered one of the stock market’s fundamental structural problems. This article shows the optimism and effort of the government to solve this problem as soon as possible. But it remains uncertain how much the current reform can improve this market which has been widely criticized for lacking transparency and protection of investors’ right.
