Stocks News
- Official says no major sell-off of State shares
Date: 20-Dec-2007 Sources: (Shenzhen Daily)
THE government would sell shares that it holds in listed State-run companies if they became highly overvalued, said Li Rongrong, head of the country's State-owned asset management agency, although he ruled out the possibility of a major sell-off of the State shares.
The Shanghai Securities News quoted Li yesterday as saying controlling State shareholders in listed companies should not speculate in stocks, but should aim instead to strengthen the firms' core businesses and create steady returns.
However, State shareholders can act to remind ordinary investors of risks in the stock market, Li, chairman of the State-owned Assets Supervision and Administration Commission, was quoted as saying.
'State firms are aware of their actual value and would be able to see any price bubbles,'it quoted him as saying.
He said that when stocks were undervalued, big State shareholders could also buy the stocks to remind investors of their value.
After a bull run that boosted the main Shanghai stock index fivefold since the start of 2006, the government has been taking a range of steps to cool the market. Some analysts think it could unload some of its shareholdings on the stock market to boost supply of equity if it feels that is necessary.
Partly to ease that concern, the government published rules in July requiring State companies to obtain regulatory approval if they sell more than a 5 percent stake in a firm which they control within three consecutive years.
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