Lock-up shares worth 42.3 billion yuan (6.5 billion US dollars) will become eligible for trade on China’s stock markets in the coming week.
About 2.32 billion shares from 15 companies will become tradable on the Shanghai and Shenzhen bourses in the coming week, data from Southwest Securities showed Sunday, according to state-run news agency (Xinhua).
SDIC Essence, a Shanghai-listed manufacturing enterprise, will see non-tradable shares worth 21.56 billion yuan become tradable on Monday, the largest amount to hit the market in the coming week.
Under China’s market rules, major shareholders of non-tradable stocks are subject to one or two years of lock-up period before they are permitted to trade.
This is not great timing especially for Industrials.
Industrial overcapacity in China has got much worse since 2009, with Beijing struggling to implement reforms and overcome the resistance of growth-obsessed local governments, a European business lobby said on Monday.
China’s central government has identified overcapacity and the closure of debt-ridden “zombie” firms as one of its key policy priorities for 2016, and it has already published action plans aimed at shutting 100 million-150 million tonnes of low-end steel capacity and 500 million tonnes of coal production.
The plans were the latest in a long line of measures aimed at tackling debilitating capacity gluts in several major industries, but it remains unclear whether Beijing can force failing enterprises out of the market and resolve problems like debt and unemployment, the European Union Chamber of Commerce in China said in a report.
“China is always enticing industries to grow. The system breeds overcapacity,” said Joerg Wuttke, president of the chamber.
With regional governments still chasing growth, there are insufficient incentives to close down failing firms, which are also treated leniently by local banks and environmental regulators, the report said.
Local governments have also obstructed mergers and acquisitions amid fears that vital tax revenues will be transferred to other jurisdictions, and China needs to provide more revenue streams for regional authorities, the report added.
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