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Property-rights exchanges expected to be merged
( 2003-12-04 10:12) (China Daily HK Edition)

Two property-rights exchanges in Shenzhen are expected to be merged soon to regulate the transfer of State assets and improve services for small- and medium-sized privately owned companies.

The merger draft, worked out by the city's Venture Capital Association, will be discussed by the municipal government at the end of this month, a reliable source was quoted as saying by Chinese-language newspaper 21st Century Business Herald.

Wang Shouren, secretary-general of the association, is reluctant to reveal the details of the draft, only saying that the merger mode would be different from that of Shanghai, China's financial centre.

Shanghai's three property-rights exchanges, the Shanghai Assets and Equity Exchange, the Shanghai High-tech Equity Exchange and Shanghai Technology Exchange, have got the approval from the local government to form a joint assets and equity exchange.

It will provide a platform for not only the transfer of State assets and equity but privately-owned and foreign-funded companies' assets. However, after the merger, the joint exchange will be directly managed by the municipality's State-owned Assets Office.

"We expect Shenzhen will allow its merged property-rights exchange to run as a corporate entity, with about 100 million yuan (US$12.0 million) share capital," said a source close to the draft, according to the Chinese report.

Shenzhen Assets and Equity Exchanges was set up in 1993 and became a government institute in 2000, responsible for the transfer and acquisition of State-owned assets.

The other, Shenzhen High-tech Property Exchange, was set up in 2000 during the second China High-tech Fair, one of the country's largest high-tech fairs held annually in the city, to help privately-owned companies and small- and medium-sized high-tech companies.

As the country's first share-holding property exchange, it was set up by nine companies, including the city's largest venture capital company Shenzhen Capital Group and a subsidiary of China Merchants Group, with a registered capital of 30 million yuan (US$3.6 million).

The general manager of the high-tech property exchange Zhao Hui said earlier that more than 2,000 qualified projects have been listed on the exchange since its establishment with transaction volume reaching 6.8 billion yuan (US$819.3 million).

However, insiders said the exchange could hardly make profits despite having more transactions than many other cities.

The expected launch of the second board for high-tech start-ups in Shenzhen will also provide opportunities for the merged property-rights exchange, said market analysts.

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