Sinochem International: big shareholders thinking much over increasing shares in hand

The announcement made by Sinochem International several days ago said, from Aug.12th , 2005 when Sinochem, the company's largest shareholder began to successively buy the company's stocks through the trading system of SSE, to the trade-ending moment on Sep.22nd 2005, Sinochem has totally increased up to 64.4143 million shares, accounting for 5.12% of the aggregate equity. Mao said, the reason why it does so is that, like all other investors, it was convinced that they would get value for money from buying stocks of Sinochem International.

However, as people can see from current situations of the first and second patch of pilot companies of the reform, to their regret, there are quite a few companies experiencing natural ex-right. Just imagine. If after the reform is end, stock prices of most companies go down and there is no way for the consideration those tradable-shareholders who support the reform have to convert into money, then it would be hard to foretell the day when the market rebuild their trust. It is just out of this consideration, that Sinochem International proactively takes measures to maintain the stability of stock price. Just like Mao said, the plan of share increasing is proposed out of the active sense of responsibility of big shareholders to guarantee the interests of shareholders participating the reform.

Mao said, as an enterprise under the control of Central Government, Sinochem always attaches significance to its own image in the market. Though the company increased its shares of Sinochem International out of the purpose of making investment, it didn't make the purchase after the stock price got rights off naturally, instead, it took the initiative to keep the stock price within a certain range though increasing shares on the first day of beginning of the trade., which has brought investors partaking in the Sinochem International's reform of equity dispose substantial returns. Nevertheless, only relying on big shareholders to increase shares in hand won't uphold the confidence from the market for long. According to relevant regulations, Sinochem is prohibited to trade their stocks two days after this announcement comes out. There is limited spaces for big shareholders to operate within such a short period of time, starting from Sep.27th , 2005, the date for increasing shares, to Oct. 12th , 2005, when the trade and the share increasing for this time comes to an end.

During the interview, Mao said, to start with, companies who made commitments in share increasing and maintain stock price intended to protect investors' interests and to give shareholders who advocate the reform more confidence. However, if the stock market price of those G share companies goes below the ex-right price, then it is obviously not a wise and pragmatic act to just make investment for the sake of expressing sincerity. As long as parties concerned offer companies carrying on the equity disposal reform substantial encouragement, more companies will get enthusiasm and motivation to do the work well.

From:Shanghai Security News 2005-09-26