SSE to speed development of blue-chip market

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.