Published On: Fri, Mar 9th, 2012

Shanghai Exchange to Strengthen Supervision on Blue Chip Market

Geng Liang, SSE GovernorThe blue chip investment has increasingly become the common concern of both regulatory authorities and market participants. The SSE, with an aim of building a blue chip market, is faced with both arduous tasks and rare development opportunities.

“Under the current circumstances, the SSE blue chip market has begun to take shape. By the end of February in 2012, the SSE boasts 934 listed companies with the total market value of RMB16.6 trillion, or about 35.5% of the GDP in the same period. Up to now, 237 listed companies on the SSE, each with the market value of over RMB10 billion, totaling 83% of the total market value on the SSE, are the constituents of the SSE’s blue chip market,” said Geng Liang, SSE Governor and Member of the National Committee of the Chinese People’s Political Consultative Conference in Beijing yesterday.

On the other hand, the market value of 91 loss-stricken listed companies, or 10% of the total on the SSE, accounts for 2% of the total market value, while that of 94 meager-profit-featured listed companies with the net profit of RMB0.07 per share, or 10% of the total, accounts for 2.2% of the total. The market value of these companies adds up to only 4.2% of the total.

“With a view of developing the blue chip market, efforts should be made to attract, support and encourage well-performed companies to go public on the SSE. Last year, the SSE embraced the listing of 39 large-scale quality companies, a record-high number in the last decade. Besides, more pains should be taken to facilitate the reorganization, merger and acquisition of listed companies, their overall listing and expansion. Last year, 44 listed companies succeeded in their reorganization, merger, acquisition and overall listing,” continued Geng.

The SSE will continuously attach importance to strengthening supervision. First, it will keep supervising the information disclosure of listed companies. Second, it will go all out for the market supervision by curbing insider trading and market manipulation. Third, it will cement the daily supervision on the securities companies and other member institutions as well as crack down on their rule-breaking activities.

Source:Shanghai Securities News

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