To Get Rich is Glorious!: China's Stock Markets in the '80s and '90s (Studies on the Chinese Economy)
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From village collectives in Southern China in the early 80s to the summer 1999 share rally, To Get Rich is Glorious provides a guide to twenty years of China's stock markets. The book analyses the changes that have occurred in all areas of China's securities business including legal, regulatory, share structure, issuers, investor base and market performance. Topics are placed in the context of the industry's overall development to highlight the market's current situation as China enters the new century.
8.5 8.6 Market Regulatory Structure The PBOC as Securities Industry Regulator: 1986–92 The CSRC as Securities Industry Regulator: 1992–present The Internationalization of the CSRC The CSRC’s Domestic Development The Issuers and the Listing Process The Selection Process for Listing Candidates The Listing Approval Process Overview of Corporate Restructuring for International Listings A Case Study of International Listing Approvals Pricing Analysis of Listed Companies 78 80 81 82 88 91 93 98 101
decision. The PBOC was not happy and neither were other agencies including the Ministry of Finance and its panoply of subordinate bureaus such as the State Asset Management and State Land Management Bureaus. And, of course, the securities exchanges and their sponsoring local governments were not happy. Although the CSRC was established in late 1992, it was not solidly established until 1998, a victory memorialized Market Regulatory Structure 93 by the Securities Law of 1999, itself, like the
may have a beautiful plant which is poorly operated and creates no value at all. In fact, there are any number of these littered across the Chinese landscape. On the other hand, if the State Asset Management Bureau requires an asset appraisal, arrangements are made to provide one. The Bureau takes the report seriously even if no one else does. As discussed in Chapter 3, the concept of value contained in an asset appraisal report represents the replacement cost of the assets. This approach assumes
new regulations allowed them to subscribe to IPOs subject to holding restrictions (or a ‘lockup’) of six months for a so-called strategic holding or three months for a common investment. Listed companies have also been restricted from share trading but these regulations are typically skirted by going through a related party. Smaller ﬁrms make use of an individual account to trade as internal control is often lacking and money transfers are more easily done. The corporate investment mentality is
capital appreciation via investments in treasury bonds and stocks listed in China ● 20% net assets must be in CGBs ● Not less than 80% of net assets in stocks and CGBs ● Investment in 1 company must be less than 10% of net assets ● Investment in 1 company not more than 10% of company’s total capital 15 years Natural persons residing in China 2.5% per annum Not less than 90% of net earnings ICBC Investment restrictions Maturity Buyers Management fee Distribution policy Custodian Table 7.9: