Shanghai Daily news

Shanghai shares drifted slightly down yesterday after a media report said more than 40 listed companies may announce their plans to convert state holdings into tradable stock next month.
Machinery maker Sany Heavy Industry Co, the first company to sell state shares in a revived government program, led the decline after 21 million shares offered by the company's major shareholders to minority investors started trading.
"Investors are still concerned about a glut of shares," said Liu Yu, an Orient Securities Co analyst. "Uncertainty clouds the market whether picked firms can push forward well-accepted proposals."
The Shanghai Composite Index, which groups yuan-denominated A shares and foreign-currency B shares, slipped 0.04 percent to 1,085.61. The A-share Index lost 0.01 percent to 1,140.18 while the B-share Index dipped 2.08 percent to 64.84.
Over 40 publicly traded firms are expected to gain government approval to dispose of non-tradable shares on July 2, the second group to do so under a government-led plan, Securities Market Weekly reported yesterday, without citing anyone.
These companis will include state-owned enterprises, and small and medium-sized private businesses, the report said.
So far, more than 100 publicly traded firms have filed applications for the share conversion, according to the report.
China on May 9 picked four companies to start selling non-tradable shares, which include holdings by city, provincial and central governments, and stock held by state-owned companies. The Shanghai key index has fallen 7 percent since then.
There will be only three groups of companies involved in the pilot program to sell off government holdings, the Beijing Times said on Tuesday, citing a senior official at China Galaxy Securities Co, the country's biggest brokerage.
After the trial, the program to dispose of state-owned shares will be extended to all listed companies on the Shanghai and Shenzhen bourses, the paper said.
Shares of Sany Heavy Industry slumped 30.27 percent to 16.61 yuan (US$2) yesterday. The share price movement was not subject to a 10 percent daily limit.
The shares, which began trading yesterday, had been offered to compensate for the planned conversion of the remainder of the non-tradable shares in the company into listed shares.
Minority investors received 3.5 shares and 8 yuan in cash for every 10 shares held. The conversion will occur in two years.
The company also said yesterday it plans to spend as much as 200 million yuan buying into not more than 5 percent of its total equity to stabilize share prices.
"It's natural minority investors trimmed positions to reap profits," said Zhu Yan, an investment adviser at Bank of China. "As the company pledged to buy their own free-floating stock, the market price will hopefully rise."
The securities regulator said on Sunday it will allow companies involved in the program to buy tradable shares. The move was aimed at avoiding irrational market volatility and protecting interests of minority shareholders, the regulator said in a statement.
Also yesterday, Hebei Jinniu Energy Resources Co, the fourth Chinese company to sell state shares in the pilot program, said its proposal has been approved by minority shareholders.
Shareholders representing 81 percent of the company's tradable shares on June 10 approved a plan that will allow major shareholders to trade their stakes publicly on the stock market.
The coal producer said earlier its controlling shareholder will offer 2.5 shares for every 10 held to minority investors. Holders of non-tradable shares won't be allowed to trade the shares for 24 months.