China issued a notice Monday encouraging mergers, cash bonuses and share repurchases by listed companies. It is conducive to stabilizing the stock market, and marks the official establishment of the rock bottom for blue chips on China's stock market, said Li Daxiao, chief economist of Yingda Securities.
Li holds that blue chips will benefit from the policy, and mergers and cash bonuses are specific measures to repay investors, which will help enhance rewards to investors.
As part of China's efforts to push forward reforms of state-owned enterprises and promote the steady and healthy development of the capital market, the notice was jointly announced by China Securities Regulatory Commission, Ministry of Finance, State-owned Assets Supervision and Administration Commission of the State Council and China Banking Regulatory Commission. The notice took effect Monday.
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