Shanghai Daily news

The long-term prospects for China's stock markets, which resume trading today, seem to be enhanced by the move to end the irrational share holding to help the bourses develop further although concerns may prevail, analysts said.
Shortly after domestic bourses closed on April 29 - the last session before the weeklong May Day holiday - the nation's securities regulator started a trial program to dispose of state holdings in listed firms.
A pessimist might say the move may sooner or later swamp the already-weak markets with new shares and further fan concern over tight liquidity.
But optimists are likely to argue the regulator is striving hard to move closer to international standards by ending an irrational share structure. This step is considered good, or even a must, for the market's long-term development, they said.
"I am bullish on the long-term prospects as market fundamentals and corporate governance are set to improve," said Liu Yu, an Orient Securities Co trader. "For the short term, companies possibly to be included in the pilot program may experience brisk trading."
There is speculation that eight firms, including Wuhan Iron & Steel Co and Shanghai Fosun Industrial Co, will become the first batch in the pilot program.
The China Securities Regulatory Commission said in an April 29 circular that plans to free state-owned shares must be worked out by individual listed companies on a case-by-case basis.
Non-tradable shares will be locked up for at least a year after receiving regulatory approval to be converted into tradable entities, according to the circular.
After the freeze period, a state holder is restricted to selling up to 5 percent of the total shares it owns in a listed firm in 12 months and 10 percent in 24 months. All state holdings must be circulated through a bidding system.
A proposal to dump state ownership in a public company must be approved by at least two-thirds of holders of tradable shares who vote either at a shareholders' meeting or through an online platform.
"Anyway, it's natural for some investors to link the news with accelerating fund-raising activities and capital shortage," said Zhang Li, a Huatai Securities Co analyst. "Uncertainty is doomed to prevail."
About two-thirds of the shares of mainland listed companies are still in state hands.
"The market trend will probably hinge on whether an upcoming redemption scheme can satisfy existing shareholders," said a trader with Guosen Securities Co. "If initial plans fail to win the nod from minority shareholders, investors may lose confidence in the project."