In a move seen as a bid to cool the overheating market, the mainland's stock regulator indicated it would increase the supply of freely traded shares. Addressing a forum in Beijing, China Securities Regulatory Commission chairman Shang Fulin said his agency would encourage more qualified companies to list shares and take measures to unlock more non-tradable shares to stabilise the market. Although Mr Shang did not say the measures were aimed at capping the high-flying indices, analysts said that was what regulators hoped to achieve. 'If there is any indication to go by, the chairman is cautioning investors against an overheated market but the commission will still take a go-slow approach,' said Citic Securities analyst Sun Chao. Most mainland-listed companies have completed a reform to make state-owned shares tradable. However, the previously non-tradable shares, accounting for about two-third of the market's total, are subject to a lock-up period and will not be entirely free floating for three years. Mr Shang declined to provide details on how Beijing would increase the free float of those non-tradable shares. 'Once the lock-up period passes, firms have the right to sell part of their shares as they see fit,' he was quoted by Reuters as saying. 'But that's the companies' business.' Market observers speculated that the central government would order state companies to sell their shares as soon as the lock-up periods expired to cash in on the recent rally. The Shanghai Composite Index gained 141.77 points or 2.46 per cent to a fresh record of 5,913.23 yesterday. The benchmark indicator has risen 128.7 per cent so far this year. Analysts predict the market will break the 6,000 point level today amid strong buying interest. In another effort to mop up liquidity, the CSRC has been bringing back major Hong Kong-listed mainland corporates for domestic listings, including China Construction Bank and China Shenhua Energy. 'It is a savvy move to rein in over speculation through an increase in share supply,' said analyst Wu Kan at Shanghai Securities Consulting. 'The regulators are doing their job correctly.'