Abstract:

It is very urgent for those quoted companies to decrease their holdings of state - owned stocks, since this is a major link in the whole strategic structure of state - owned economy. However, the decrease and reorganization of state - owned stocks is just like a double - edged sword. Inevitably it will produce an impact on the security market when state - owned stocks are activated. Therefore, the fundamental principles should be effected, that is, fairness, stability, and efficiency. There are three problems which should be well solved: first, clearly confining state - owned economy to some trades that may be done and some that may not be done; secondly, taking various measures and channels to diversify state -owned stocks; thirdly, having the aid of consultative agencies.

Key words: quoted company, decrease of holdings of state - owned stocks, executive stock option, investment fund for state - owned stocks