Chinese authorities said they will further study the inclusion of market value management in the performance assessment of executives of key state-owned enterprises while stressing companies without reasonable returns are not qualified as listed firms.
China's state assets supervisor said yesterday that such inclusion will help guide the person in charge to pay more attention to the market performance of the listed SOEs and give better rewards to investors by timely share buybacks.
The State-owned Assets Supervision and Administration Commission also revealed that SOEs directly owned by the central government posted a net profit of 1.1 trillion yuan (HK$1.2 trillion) last year.
This came as Wang Jianjun, vice chairman of the China Securities Regulatory Commission, said in an interview that China will make more efforts to build an investor-centered capital market.
Wang said the quality of a listed company lies in its return to investors. Companies without a reasonable return should not be regarded as qualified listed companies.
In a separate way to stabilize the slumping stock markets, China's regulators have asked some hedge fund managers to restrict short selling in its stock index futures market, citing two sources.
A hedge fund manager said he received calls from China's financial futures exchange, cautioning against reckless short selling, especially "naked" short selling that is not conducted for hedging purposes
Another hedge fund source said the exchange had informally asked his firm recently not to short sell for speculative purposes.
"Shorting is profitable in a falling market," the source said. "But if you get calls from the exchange, you get the message that you should no longer short sell to make a profit."
China's stock market tumbled 13 percent in 2023 and has extended its slide in the new year amid relentless foreign selling, a deepening property crisis, and a shaky economic recovery.
On Tuesday, CSRC chairman Yi Huiman vowed to safeguard the stable operation of the capital markets with full force. China's State Council, or cabinet, also pledged more forceful and effective measures to support market confidence.
The sources said regulators did not spell out specific curbs in their informal guidance, but hinted that shorting activities using stock index futures would be curbed.
Wang Jianjun wants the market to be more investor-centric. Reuters
