The Shanghai Stock Exchange on Aug 16 issued a draft guidance for listed companies' cash dividends, in which it said it will give priority to companies offering a dividend payout ratio above 50 percent.

The SSE said the guidance is to encourage cash bonuses, but does not demand compulsory dividends.

The SSE will give priority to companies with high dividend payout ratios in financing, mergers and market access, awarding and assessment, it said.

Companies listed in Shanghai have been improving their dividend levels in recent years.

However, some companies do not provide clear dividends guidance, or adopt improper profit-sharing mechanisms, which need to be regulated, the SSE said.