Analyst Cao Zhongming: Normative efforts to reduce restricted stocks need to be strengthened

Analyst Cao Zhongming: Normative efforts to reduce restricted stocks need to be strengthened

It is necessary to increase the number of restricted stocks to reduce the number of flats. Cao Zhongming statistics show that in January 2019, the A-share market broke the peak of restricted stocks and lifted the ban.

8 billion restricted shares have been lifted, with a total market value of more than 270 billion yuan.

On January 3 alone, 30 listed companies in the Shanghai and Shenzhen stock exchanges issued concentrated reduction announcements, and many of them have liquidation-type reductions of large shareholders with a relatively high proportion of shares.

  For example Xinjiang Torch holds 17 shares.

19% of the shareholders Jiuding investment and shareholding9.

09% shareholders, Junan Xianghe and Wang Anliang, intend to reduce all their shares and gradually take up 26% of the total share capital of listed companies.


Pengyuanhuan holds 19 shares.

47% of shareholders are CIENA ENTERPRISES LIMITED and hold 10 shares.

98% of shareholders’ Wei Lion Investment intends to liquidate all the shares they hold, gradually accounting for 30% of the total share capital.


The liquidation-type reductions by the relevant shareholders of the two listed companies are called “big efforts”, which directly leads to the distortions that have always existed in listed companies.

Clearing-type reductions by major shareholders of listed companies will not only affect the interests of small and medium investors, but also amplify market risks.

Therefore, the supervisory authorities have repeatedly issued measures to regulate the reduction of restricted stocks and have achieved certain results, but they have not been able to release the blood-drawing effect of restricted stocks on the surface of market funds.

  It is estimated that, based on the closing price on December 28, 2018, the value of trucks with lifting restrictions in 2019 will reach 2.

66 trillion, although the scale of lifting the ban is not equal to the scale of cash reduction, but just looking at the data can only create psychological pressure on investors.

Judging from the reduction in sales of restricted stock in recent years, the amount of cash is not small.

A 2016 restricted stock was cashed 283.7 billion. In May 2017, due to the introduction of “Some Rules for Shareholders of Listed Companies, Dong Jian Gao Reduced Shares” (hereinafter referred to as the “Reduction Regulations”), the cash amount of restricted stocks in the year was as follows:It fell by 160 billion yuan.

As the issuance of new shares is normalized, the scale of restricted stocks is increasing, and the market is under increasing pressure.

After considering this, the author believes that there is still more need to regulate the restricted stocks.

  First of all, it is necessary to further tighten the period and the number of holdings of the restricted stocks.

According to the “New Regulations for Reduction of Shares”, restricted stocks are reduced through auctions on the exchange, and the reduction ratio for 3 months shall not exceed 1% of the total share capital.

You can reduce your holdings by 4% in one year. The 4% reduction is not a lot for a listed company.

Moreover, taking into account the interests of shareholders of some listed companies, the proportion of reducing their shareholdings through the secondary market in one year is not small.

Therefore, can it be considered that each shareholder may not reduce its shareholding by more than 2% through the secondary market each year?

Regarding the lock-up time of restricted stocks, it is recommended to lock up more than 5% of the shares for 5 years, and the lock-up period of less than 5% is more than 3 years.

  Generally, certain major shareholders often implement bridge reductions through transfers through agreements and block transactions.

According to the “New Regulations for Reduction of Shareholdings”, the transfer of the transfer agreement and us and the transferee shall comply with the requirement of reducing the shareholding within 3 months to no more than 1% of the total share capital within 6 months after the shareholding is reduced, and there will be no restrictions after 6 monthsThis is also the fundamental reason for frequent bridge 杭州夜生活网 reductions in the market.

It is suggested that this provision be amended so that the relevant transferee may reduce its shareholding in the secondary market by no more than 2% each year, in order to suppress the urge of major shareholders to cross the bridge and reduce their holdings.

  In addition, in response to the ongoing violations of the market to reduce holdings, it is recommended to establish a share repurchase system for offenders.

It may be provided that anyone who illegally reduces the shareholding shall be bought back from the secondary market by the offender, and if there is a profit, it shall be owned by the listed company.

  (The author is a senior market watch analyst)