The documents grant the controlling holders holding state-owned shares of listed companies some independence and flexibility in selling some of the shares they hold, and at the same set limits so as to prevent them from massively selling shares to affect the stability of the stock market.

   According to the documents, a holder of state shares may make decisions independently if its transfer of shares via the securities trading system within three consecutive accounting years is less than 5 percent of the total share capital of the listed company and also does not lead to transfer of the controlling power over the listed company. If the proportion exceeds 5 percent, or transfer of less than 5 percent shares will cause transfer of the controlling power, approval by the state-owned assets supervision authority is necessary.

   The aforesaid provisions are able to prevent holders of state shares in listed companies from selling their holdings in a concentrated way and massively, which may lessen the worry of stock investors over large quantity sell-off of state shares and in turn cause tumble of share prices on the Shanghai and Shenzhen stock exchanges.

   However, with the issuance of the official documents, analysts believe that sale of state shares on the secondary market will be inevitable as it is permitted by the authorities, which is indeed to cast unfavorable pressures on share prices.

   But many analysts say the pressures will not be as great as the market has worried earlier as the official documents set limits on sale.

   The documents also provide that transfer of state shares shall be priced by the market pricing principle in the future. 

   Chinese stocks have responded positively toward the new documents, with the indices bouncing back strongly on Monday and last Friday.  (InfoChina)