Mainland companies could consider issuing warrants as a way of disposing of their non-tradable shares, according to James Liu, an executive vice-president of the Shanghai Stock Exchange. 'The warrant issue would be a cost-effective and flexible way for the companies to dispose of their non-tradable shares,' Mr Liu said on the sidelines of the World Federation of Exchanges forum in Beijing yesterday. 'Warrant holders will be able to exercise their rights to buy the company's shares at any time before the expiry date,' said Mr Liu, adding: 'This will help to make sure the share disposals put less selling pressure on stock markets.' Mr Liu's remarks came after the central government on Tuesday issued guidelines urging leading state firms to submit proposals to sell non-tradable shares, an expansion of a month-old pilot scheme that aims to restore investor confidence in the stock markets. Last month, China chose four small private and local government-backed firms - Shanghai Zi Jiang Enterprise Group, Sany Heavy Industry, Tsinghua Tongfang and Hebei Jinniu Energy & Resources - to launch the trial scheme. The guidelines issued on Tuesday by the China Securities Regulatory Commission and the State-owned Assets Supervision and Administration Commission expanded the scheme to include larger, state-owned enterprises, although none have been named yet. About 65 per cent of the shares - equal to 2.08 trillion yuan in market value - of mainland listed firms are non-tradable state shares and legal-person shares held by central and local governments and state-owned companies.
