The Shanghai Stock Exchange said on Thursday it will accelerate development of the blue-chip market in 2014, promoting preferred shares issuance and raising dividend payments.
In China, most blue chips?- stocks that have a national reputation for quality, reliability, and the ability to operate profitably in good times and bad?- have low valuations, because their chunky market capitalization makes them hard to manipulate in a speculation-dominated stock market.
At the moment, the average price-earnings ratio for the SSE, where most of China's blue-chip companies are listed, stands at 13, compared with 28 for the Shenzhen Stock Exchange, which is dominated by small-cap shares.
The Shanghai Stock Exchange said in a statement posted on its website that a healthy and vibrant blue-chip market serves the real economy better, and helps instill the concept of value investment in China's stock market.
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