Beijing's policy somersault on the state's disposal of shares could lead to a rush of private sales of government stock by domestic and foreign investors, according to a brokerage.
BOCI Research managing director Ho Cheuk-yuet forecast accelerated growth in private share transfers between state-owned companies and strategic investors at home and multinationals following the Government's change of heart at the weekend.
The move could lead to faster corporate reform in the next few years.
On Sunday, Beijing announced it would scrap a controversial plan to sell its state holdings on the stock markets to support its under-financed pension system. The change was aimed at boosting the slumping stock market in the run-up to a leadership change in October.
'Aside from bringing in fresh capital, the [private transfer] would hopefully facilitate corporate reform,' Mr Ho said.
'Now the marriage between the merging partners will be slightly different from that of five years ago. Mainland firms that are up for a merger are no longer money-losing companies, they are companies with market share and capability but need outside management to give them a lift.'
