The ongoing split share reform should be conducted in a stable and orderly way so as to help the stock index rebound gradually, Li Rongrong, minister in charge of the State-owned Assets Supervision and Administration Commission, told the China Securities Journal recently in an interview.

Different methods should be chosen for the stock reform of those listed companies with huge deficits, he was quoted by the newspaper.

China started the latest reform in its capital market on May 9 to end its split share structure -- one of the major culprits in the country's sluggish stock markets. Split share structure refers to the existence of a large volume of non-tradable state-owned and legal personal shares.

Four companies were selected for the first round of reform experiments and 42 more were involved in the second round that kicked off on June 19. To make all their shares tradable, those pilot companies selected have proposed compensation plans in various forms, some of which were welcomed by public investors and others not.

Non-tradable shareholders should have enough exchanges with tradable shareholders on the compensation issue, Li said. Those listed state-owned enterprises (SOEs)overseen by the State-owned Assets Supervision and Administration Commission are the basis of the stability of China's stock market, he said.

The Commission in August is expected to promulgate a circular to allow managers and employees inside SOEs to buy increment shares in the stock reform, he said.

Source: Xinhua