Title: Encouraging Private Listed Companies to Conduct Proper Market Value Management
On January 29, the State-owned Assets Supervision and Administration Commission of the State Council held a 2024 assessment and allocation work meeting for central enterprises and local State-owned Assets Supervision and Administration Commission. At the meeting, it was proposed that in 2024, all central enterprises should promote the comprehensive implementation of the “one enterprise, one policy” assessment and comprehensively promote the market value management assessment of listed companies.
This initiative has garnered significant attention, with stocks with Chinese prefixes outperforming the broader market in response to the measure. Despite this positive market interpretation, there are concerns regarding the impact on small and mid-cap stocks, which continued to decline, with some experiencing severe falls.
In response to market concerns, regulatory authorities have introduced new regulations on holding reductions and adjusted the securities lending business. The China Securities Regulatory Commission adjusted the securities lending business and completely suspended the lending of restricted stocks, aiming to block the back door of “detour reduction” of some restricted stocks.
However, in order to improve the capital market value, stronger measures are needed. The author suggests linking the conditions for reducing holdings of large and small companies to the growth of the company’s market value. This would ensure that shareholders are incentivized to contribute to the growth of market value.
The author also emphasizes that proper market value management is not synonymous with stock price manipulation, but rather encourages and guides private enterprises to launch appropriate and reasonable market value management measures to respond to market calls.
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