A working group set up by the Securities and Futures Commission (SFC) is in discussions with the People's Bank of China (PBOC) on ways to support central enterprises and some listed corporations who wish to repurchase shares of their listed companies, reported China Business News on Friday.
Li Rongrong, director of the State-owned Assets Supervision and Administration Commission of the State Council (SASAC), expressed his support for the move at a press conference, and said he hoped financial institutions would assist.
A SASAC official said that because many central enterprises are short of funds at present and regulations do not allow the use of bank credit to purchase shares, many firms lack the cash to finance large scale repurchases of stock.
To help central enterprises increase their stakes, the PBOC is likely to re-issue medium-term notes (MTNs), and the SFC may allow listed corporations to issue corporate debt instruments to finance share repurchases.
For more details, please read the complete story in Chinese:
(http://www.china-cbn.com/s/n/000002/20080926/020000090229.shtml)
(China.org.cn by Fan Junmei, September 26, 2008)
