Shanghai Stock Exchange's new measures to encourage listed companies to increase dividend payouts could boost investor confidence in the market.

According to the new rule, companies whose dividend payout to shareholders is less than 30 percent of their net profit will have to publicly explain the decision. Companies that have dividend payment of 50 percent of their net profit will find it easier to get approval for refinancing on the stock market.

The reluctance of listed companies to pay out dividend is one of the main reasons behind the wild speculation on the stock market. Only a few investors stick to long-term value-based investment, partly because they cannot get much reward from corporate dividend payouts.