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Moves by CSRC fail to give lift to equities

(China Daily)

08:21, November 11, 2011

SHANGHAI - China's securities regulator has asked listed companies to improve their dividend policies to provide higher payouts to shareholders, the China Securities Journal reported on Thursday.

The China Securities Regulatory Commission (CSRC) also said it will make initial public offerings (IPOs) and refinancing transactions more transparent to protect investors, the newspaper said.

The announcements came with the benchmark stock index down nearly 12 percent year-to-date.

However, the moves didn't help the market gain any traction on Thursday.

The Shanghai Composite Index fell 1.8 percent, to 2479.54, its biggest loss in three weeks. Shares were undercut by news that China's exports had grown at the slowest pace in nearly two years in October and concern that Europe's debt crisis was deepening even further as Italian bond yields surged.

The CSRC report "is definitely good news, but what the CSRC announced is too vague. It said what to do but didn't say what will happen if companies didn't comply", said Wang Jianhui, chief economist with Southwest Securities Co.

"So the news didn't have much short-term impact on the stock market."

The CSRC said companies should disclose in their prospectus detailed dividend policies and profit-sharing plans, which should not be changed arbitrarily, according to the newspaper.

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