BEIJING, Oct. 14 (Xinhua) -- The State Council, China's cabinet, issued a guideline to improve the quality of listed companies on October 9. Industry insiders pointed out that the guideline paves way for a healthier development of capital market.
China will strengthen institutional construction of the capital market, step up market oversight, optimize the structure and development environment of the listed companies, and improve the quality of information disclosure, according to the guideline.
Statistics from the Wind showed that there had been 4,056 listed companies in China as of October 9, with the total number of shares coming to 7.27 trillion and circulating A-share market value amounting to 59.31 trillion yuan. Specifically, 1,746 companies were listed on the Shanghai Stock Exchange (SSE), with a total market value of 41.37 trillion yuan, while 2,310 companies were listed on the Shenzhen Stock Exchange (SZSE), with a total market value of 31.75 trillion yuan.
China boasts a large scale of listed companies, covering all sectors of the national economy and playing an increasingly prominent role in promoting economic development. However, listed companies still face such problems as nonstandard governance and poor development quality. Therefore, improving their quality has become an important part in the current reform of capital market.
"Listed companies are the cornerstone of the capital market," said Yang Delong, chief economist of the First Seafront Fund, adding that the capital market can achieve a long-term sound development only when the quality of listed companies is improved.
The guideline provides clear arrangements for the ways to improve the quality of listed companies, which can help investors better share the development achievements of the capital market, according to Yang.
In terms of specific works, the guideline puts forward 17 key measures in six aspects, including enhancing the governance of listed companies, encouraging listed companies to become better and stronger, strengthening the exit mechanism for listed companies, solving their prominent problems, stepping up punishment for irregularities, and making concerted efforts to improve their quality.
According to Dong Ximiao, chief researcher of the Merchants Union Consumer Finance Co., Ltd., the key to developing direct financing is to improve the quality of information disclosure, and the latter is closely related to corporate governance. The guideline proposes that corporate governance and information disclosure levels are two key points to improve the quality of listed companies.
In order to encourage listed companies to become better and stronger, the guideline suggests that high-quality enterprises should be supported to go public. Efforts should also be made to optimize issuance and listing standards, promote market-based merger and acquisition (M&A) and restructuring, improve the system for assets restructuring, acquisition and spin-off listing, and improving the financing mechanism of listed companies.
To strengthen the exit mechanism for listed companies, the guideline proposes that China should put strict supervision on delisting, improving delisting standards, and simplifying delisting procedures. Malicious evasion of delisting by means of financial fraud, profit transfer and market manipulation should be severely cracked down.
According to the China Securities Regulatory Commission (CSRC), the guideline, which has provided systematic and targeted arrangements for improving the quality of listed companies, is a programmatic document in the coming period. CSRC will give the top priority to this task in order to comprehensively deepen the reform of the capital market.
SSE stated that it will strive to promote the improvement of registration, delisting, M&A and restructuring, refinancing, trading and other basic institutional systems.
In addition, SZSE pointed out that it will give greater prominence to supporting scientific and technological innovation, in a bid to achieve a high-level circulation of science and technology, capital and real economy. (Edited by Zhang Yuan with Xinhua Silk Road, zhangyuan11@xinhua.org)
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