Shanghai government tells state-backed listed companies to pay more heed to market values

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State-owned asset regulator’s admonishment comes as the 440 listed companies based in Shanghai are lagging well behind the CSI 300 Index

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People ride scooters on the street beneath a large screen showing the latest stock data in Shanghai on January 2, 2024. Photo: EPA-EFE

Zhang Shidongin Shanghai

Published: 12:02pm, 17 Jul 2024Updated: 3:11pm, 17 Jul 2024

Shanghai’s regulator of state-owned assets called on listed companies domiciled in the metropolis to pay more attention to their market values, a signal of ramped-up efforts at the local-government level to shore up the flagging stock market.

Local state-backed publicly traded companies need to better manage their market value by developing their core businesses, driving tech innovation and boosting efficiency and profitability, He Qing, director of the Shanghai State-owned Assets Supervision and Administration Commission (SASAC), said at a conference on Tuesday.

Market-value management is part of a deeper reform of state-owned enterprises (SOEs) and the high-quality development of listed companies, He said. Shanghai’s SOEs should make contributions to capital-market reforms and comply with the State Council’s nine-point document, which gives a blueprint for the stock market by the middle of the century, he added.

The SASAC’s statement is part of a broader effort to shore up the US$8.5 trillion stock market and comes as the Communist Party’s high-stakes third plenary session is getting under way in Beijing. Last week, China’s stock-market regulator imposed fresh curbs on short selling and said that more detailed rules on computer-driven high-frequency trading would be introduced in a bid to restore investor confidence.

The Shanghai and Shenzhen exchanges said in separate statements on Tuesday night that they were studying the differentiated fee charges on high-frequency trading and would adhere to the principle of equal treatment for domestic and overseas investors.

A rebound in China’s yuan-denominated stocks has fizzled out recently amid underwhelming economic data and despite a flurry of forceful rescue measures from state buying to the clampdown on trading misconduct. The CSI 300 Index of the biggest stocks has dropped more than 5 per cent from this year’s high in May, with investors pocketing some gains while waiting for fresh catalysts.