(Yicai Global) Oct. 26 -- Large shareholders of China’s listed companies have started to shed shares to cash in as the country’s stock market revives after the buffets of Covid-19. The impact on company stock prices will be fleeting if none of these big players shed their shares en masse, however, a market insider told Yicai Global.

Major shareholders have unloaded CNY546.1 billion (USD81.92 billion) in shares thus far this year, more than all of last year’s tally. Personal financial considerations and the need to reallocate funds are the oft-cited reasons for these stock sales.

A total of 4,790 shareholders in 1,620 listed companies had announced equity reduction plans as of yesterday and major stakeholders of 1,835 listed firms have thus far cut their stakes, with both gauges passing those of last year, which reached 1,742 and CNY422.2 billion, according to the statistics of Chinese financial data provider East Money Information.

“Listed company performance is usually not directly linked with stake reductions by controllers, directors, supervisors and other executives, so shareholding cuts cannot impair corporate management and may just reflect executives’ normal cash needs,” a partner at a private fund told Yicai Global.

These large shareholders’ stock dumps are very frequent and involve huge sums, with 436 shedding over 4 percent of their stakes and some selling all, directly influencing the trend of affected firms’ share prices, per the East Money data.

Small-scale shareholding reductions that occasionally occur must be distinguished from steady mass selloffs, the fund partner said, adding this is usually a signal of worsening operations that arouses negative expectations and hugely impacts stock prices.

“Substantial shareholders’ occasional cutting of stakes … will most probably be digested by the market automatically, and have a limited impact,” the fund partner added.

Editors: Tang Shihua, Ben Armour