When a company's stock is underweight, it is generally bad news, and the stock price is likely to fall.

However, in the secondary market, when a listed company announces a reduction in its holdings, the stock price will also rise.

The China Securities Regulatory Commission's regulations on shareholder reductions are as follows: within any consecutive 90 days, the number of shares held by a major shareholder through bidding transactions shall not exceed 1% of the total share capital, and the number of shares reduced through block transactions shall not exceed 2% of the total share capital.

The total amount shall not exceed 3%, and the shareholding reduction plan must be disclosed 15 trading days in advance.

As an important measure to deepen enterprise reform, the basic purpose of reducing state-owned shares is to achieve the "separation of government and enterprise" and transform the operating mechanism of enterprises so that they can truly become an economic subject in the market economy. In order to achieve the fundamental transformation of the economic system,

Lay the necessary micro-foundations for establishing a truly modern enterprise system.

There are five main ways for the state to reduce its holdings of state-owned shares.

Allotment of state-owned shares.

The allotment of state-owned shares is the regular sale of part of the state-owned equity of a listed company to specific investors, so that its state-owned shares can gradually be listed and circulated.

By reducing shareholdings in this way, the state can cash out funds in a timely manner and increase the value of state-owned assets.

Stock buybacks.

Stock buyback means that a listed company repurchases the company's shares held by state shareholders and then cancels them.

Since the proportion of state-owned shares in listed companies is generally high in the early stage, there is a lot of room for repurchase. Repurchasing state-owned shares generally does not cause state-owned shareholders to lose control.

At the same time, repurchasing state-owned shares allows investors to profit from rising stock prices due to higher earnings per share. For state-owned shareholders, the transfer also allows them to revitalize their unliquidable assets and obtain realistic returns without affecting the market.

Create excessive financial pressure.

Shrinking stock circulation.

Stock reduction and circulation means that a listed company merges existing state-owned shares at the original issuance price, transfers them to strategic investment funds, and then lists them for circulation. State-owned shares and legal person shares held by strategic investment funds cannot be sold in the first year.

Starting from the second year, the type and number of stocks to be issued must be announced six months in advance.

If the state wants to withdraw from companies in certain industries, it can sell its shares to strategic investment funds; if it does not want to withdraw, it can hold them for a long time and maintain relative control.

auction.

Generally speaking, auctions are used when companies go bankrupt or liquidated. In fact, auctions can also be used as one of the ways to reduce state-owned shares.

For the country, auctions can cash out funds in a timely manner. Although the auction price will be determined by the market, state-owned shares can set a starting price that is no lower than the asset, and the country will not suffer losses as a result.

Equity conversion into debt.

The specific method of converting equity into debt is for a listed company to convert state-owned equity into debt.

The debt thus formed by a listed company can be repaid in installments or listed and traded in the form of convertible bonds. The specific proportion of convertible bonds is determined by the listed company based on its own circumstances.