SOEs to prefer HK for overseas listing
(Xinhua)
Updated: 2006-10-09 22:07
China's central state-owned enterprises (SOEs) will opt for Hong Kong as
their first choice for overseas listing, but dual listings on the mainland and
in Hong Kong will be popular, said Shao Ning, deputy director of the State
Assets Supervision and Administration Commission (SASAC).
Large central SOEs can raise hundreds of millions of dollars by listing on
overseas stock markets, while the country's emerging A-share market for trading
of Renminbi-denominated shares still cannot fully cope with their demand for
capital, he said.
Overseas listing would also enable central SOEs to strengthen corporate
governance and streamline operations using market mechanisms, he added.
Responding to recent concerns that listing state-owned companies on foreign
stock markets may cause a huge loss of state assets and marginalize domestic
capital markets, Shao said the SASAC was calling on companies already listed
overseas to offer shares on mainland stock markets.
Shao believes the domestic capital markets will benefit from the dual listing
of central SOEs on the mainland and Hong Kong stock markets, by "having a number
of listed companies that operate in accordance with international norms".
Next year, the SASAC will formulate a budget system for all operations
involving state capital and set up management companies for state-owned assets,
in order to accelerate the restructuring of central SOEs, said Shao.
The SASAC will give priority to key central SOEs, trying to ensure that they
have adequate capital. Unimportant and loss-making ones will be taken over by
assets management companies.
As restructuring and mergers progress, the number of China's central SOEs has
decreased from 198 in April 2003 - when the SASAC was established - to 165 this
year.
More efforts are needed to further consolidate the number of SOEs, in order
to "relocate resources in a more efficient way", said Shao.
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