THE stock market in Shanghai is volatile at the best of times, but has been more so recently as the debate over the state's entitlement to bonus issues took hold.
At first, that is late last year, it was assumed that the state, which owns about half of most listed companies' shares, would relinquish its entitlement to bonus shares to be announced with the December 1992 results.
This was to compensate investors who had paid premiums over par value at the time of floatation. The state, of course, receives its stakes in all companies at formation at par value.
Several of the B share issues in Shanghai of a year ago have performed pretty poorly in the stock market; particularly Shanghai Vacuum and Shanghai Chlor-Alkali.
By early 1992, it was believed by many that the state would give up its rights to bonus issues in favour of private investors by way of some sort of apology.
But now the argument is swinging round to suggest that it would be an unfortunate precedent for the state to give away its share entitlements, as it might then be expected to do so every time Shanghai companies' reserves were capitalised.