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Off-market block trade for selling big stocks
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2008-05-12 10:51:00 |
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The Shanghai Stock Exchange is encouraging institutions to enter its off-market block trading to sell large chunks of stocks to prevent eroding prices of existing shares, its president said on Saturday.
The bourse will also continue to clamp down on illegal sales of previously non-tradable stocks to prevent jitters over an equity glut, Zhang Yujun told the Lujiazui Forum.
''We welcome more institutions to join in the block-trading system and expect more big shareholders to sell their stocks in off-market trade,'' Zhang noted. ''We are on track to introduce a series of supportive policies.''
China's stock regulator issued rules last month stipulating that big stakeholders, who hope to dispose of more than 1 percent of a listed firm's total shares, to sell them in block trading. Zhang noted that block trades can effectively relieve market pressure and stabilize investors' expectations for sales of expired locked-up shares.
Zhang said the Shanghai exchange encourages the sale of more than 1.5 million shares of a public company to do so through a block trade as it would not affect stock prices on the secondary market.
He added that the exchange wants more qualified financial institutions to apply to trade on the block-trading platform and will soon give licenses to several brokerages, fund managers and insurers.
A big amount of previously non-tradable stocks started to be free floating this year after their lock-up period expired as part of a drive to make state-held equities tradable.
But some major shareholders have been found guilty of unloading their stocks directly in the market.(Shanghai Daily)
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Chinese (ÖÐÎÄ°æ)
