What is the New Concept of "Floating Non-Tradable Shares"?

That's the question the November 24 issue of Caijing magazine asks. To even understand the question, you need to know this:

"In China, about two-thirds of the shares of listed companies are non-tradable. The policy makers invented "non-tradable shares" in the early 1990s to prevent the so-called loss of state assets. Because they are not in circulation, these non-tradable shares have no real market values, or at least it is difficult to measure their market values. The spilt structure of the stock market has caused many problems, and the government is trying hard to find a proper way for the non-tradable shares to enter the market. But it is a tough job, as it is difficult to balance the interests of all sides concerned." (from Caijing magazine)

So every few months, someone comes up with a new solution. The comment by Caijing editor Hu Shuli in the magazine's latest issue looks at the latest harebrained scheme and tells it like it is:

"The new concept of "floating non-tradable shares" is so complicated, illogical and unlawful that it is difficult to implement."

If it looks like shit, smells like shit, and tastes like shit, it probably is... a new plan for selling shares without actually having to sell them!

Here is the cover of Caijing (November 24).


The large coverline is 'The return of the Internet'. The feature story is about the recent rise and rise of Chinese Internet companies that are listed on Nasdaq, and asks the question: Can those crazy times be making a comeback? The English section of Caijing's website is here.

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