The stock market's bull run has certainly not gone unnoticed by large
State-owned enterprises (SOEs) which for the first time in more than a decade
will focus on raising capital domestically rather than overseas.
SOEs now have a wider choice of listing markets; and more SOEs listed
overseas will return to the mainland market, Li Rongrong, chairman of the
State-owned Assets Supervision and Administration Commission (SASAC), said
At the same time, SASAC will try its best to make sure that listed SOEs will
live up to the expectations of investors at home and abroad.
Li did not specify how many large SOEs will launch domestic initial public
offerings (IPOs) this year but said he was "certain" that some overseas-listed
SOEs will accelerate the pace of going public back home.
China Life Insurance, which is listed on the New York and Hong Kong stock
exchanges, has won the approval of the securities regulator to issue shares on
the Shanghai Stock Exchange next month.
The country's biggest life insurer is planning to raise as much as 25.5
billion yuan (US$3.23 billion), the second-largest public offering in the
A-share market after Industrial and Commercial Bank of China (ICBC), the
country's biggest lender.
In October, ICBC raised about US$21 billion in a dual listing in Hong Kong
and Shanghai, where the offer was oversubscribed 25 times.
China's benchmark stock index rose 0.99 per cent to an all-time high last
Thursday, following reforms in the capital market and inflows of funds from
local and foreign investors.
The situation has prompted many to think that for the first time in a decade,
the stock market is able to reflect the booming economy.
"The central SOEs will contribute to the healthy development of China's
capital market," Li said. "We'll strive to improve the performance of the
central SOEs, which I believe would continue to provide good returns to
Li Yongsen, a researcher at the Finance and Securities Research Institute
affiliated to Renmin University of China in Beijing, yesterday said the shift of
larger SOEs to domestic bourses will, in turn, offer more choices for investors.
China has 161 central SOEs under SASAC's supervision, which are expected to
generate a record 720 billion yuan (US$92.3 billion) in profits this year,
according to the latest projections by the commission.
SASAC's Li yesterday also said that of 190 listed firms held by China's
central SOEs, 179 had completed or started share reforms by the end of last
He also said SASAC has established a "fairly standardized" supervision system
for the investment of SOEs: If they want to invest in non-core businesses, they
must get the commission's approval.
The annual investment of the central SOEs totals 1 trillion yuan (US$126.6
billion), 97.6 per cent of which is channelled to core business operations, he
(China Daily 12/20/2006 page1)