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National Stocks to Fade out From Listed Companies
The fading out of national stocks from listed companies has become a trend since this year. According to statistics from Panorama Network, as of last weekend, numbers of listed companies from which state owned shareholders cut stakes or withdrew was 77. July and August are the months when the withdrawals are intense. State owned shareholders from ten listed companies cut their stakes in the companies in July and another ten in August.
For a long time, national stocks have been controlling listed companies, which is China's special national condition. The over high ratio of national stock ownership led to malpractice in listed companies. The absolute ownership of state owned shareholders hiders a the inter-restrictions between shareholders. To certain extend, majority shareholders have the absolute voice and control for the listed companies, which is unfair to minority shareholders. On the other hand, the conservativeness in concept and lack of vitality in state owned shareholders are against the enterprising and progress of the listed companies.
The stake cutting in the ownership of national stocks not only solves the problem created by over high ratio of national stocks but is also conducive to state owned shareholders themselves. For such a long time the listing of national stocks has been unforeseeable, the transfer of stock ownership is a wise act for activating national assets. Meanwhile, some potential and unlisted enterprises especially private enterprises can get access to the stock market through buying the transferred national stocks. The withdrawal of national stocks could be compared to the saying one stone hits two (several ) birds, and it brings bigger influence on listed companies. Some companies with more innovativeness brings vitality for listed companies through buying national stocks, and what's more, changes the concepts of the listed companies.
In the new round of withdrawal tide, private enterprises are the leading roles in the stocks transfer takes, and many of the private companies come from Shenzhen and Shanghai. Industry insiders attributed the phenomenon to more high quality talents and more mature market economic environments in the cities. The withdrawal of national stocks from listed companies will last, according to the insiders.
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