Plan set to raise more funds for Financial Street
By Liu Jie (China Daily)
Updated: 2004-02-25 10:31

Financial Street Holding Co Ltd, the sole developer of Beijing's Financial Street (Jinrongjie), decided to issue 76 million yuan-dominated A-share with face value at 1 yuan (12 US cents) per share to raise 800 million yuan (US$96.36 million) for two real estate projects on the street.

So far, the plan is awaiting approval from the shareholders' meeting, which is scheduled to be held on March 25 in Beijing, said Financial Street Holding Co Ltd President Liu Shichun.

The Financial Street's logo. [newsphoto/file]

According to the company's announcement published on Tuesday, 600 million yuan (US$72.29 million) will be pooled into construction of three buildings, covering 24,002-square-metres and with a combined building area at 140,400 square metres, in the A area of the Financial Street.

Meanwhile, the remaining 200 million yuan (US$24.1 million) will be for the development of an office building with a total construction area of 88,550-square-metres in the street's B area.

"Issuing new shares in the market will help us speed up the development steps in a bid to reach the target of completing construction of the street which will be a national financial administrative centre and an international financial hub by 2005," Liu said.

After taking over another major company in the banking street - the Finance Street Construction and Development Co Ltd, Finance Street Holding obtained the exclusive developing rights to the street's land and was listed in Shenzhen Exchange A share index in 1996.

The company reported a sound performance last year with business revenues totalling 1.44 billion yuan (US$173,4 million), a 55.59 per cent increase over the previous year.

And net profits amounted to 207.49 million yuan (US$25 million), up by 24.19 per cent over 2002.

By the end of 2003, the net assets of Financial Street Holding Co Ltd had reached 1.09 billion yuan (US$131.3 million).

Wang Ping, a researcher with the Economic Research Institute under the Chinese Academy of Social Sciences, said that the rapid development of Beijing's Financial Street reflected the capital's demands to encourage various financial institutes from home and abroad to set up offices here.

The 1-square-kilometre Financial Street is located in Beijing's downtown core, in Xicheng District. It is the only business zone within Beijing's Second Ring Road.

More than 530 government departments, financial institutions and corporations, including the Bank of China, the Industrial and Commercial Bank of China and the People's Insurance Co of China - have established their headquarters in the area. Companies located on Financial Street manage a combined 13 trillion yuan (US$1.57 trillion) worth of assets, and they control 90 per cent of China's capital flow.

The firms also make use of 65 per cent of China's insurance revenues. Top-level development and the gathering of conglomerates and business elites on Financial Street have resulted in major business opportunities for investors.

"Financial Street Holding is increasing its international expansion by attracting more foreign businesses," Liu said.

China's membership in the World Trade Organization (WTO) will give Financial Street tremendous opportunities to achieve that goal.

China, in accordance with its WTO commitments, will allow foreign banks to conduct Chinese currency business in Beijing by the end of this year.

More than 100 foreign banks have opened offices in Beijing. Experts believe many of these banks will establish offices and, in some case, corporate headquarters on Financial Street to capitalize on its geographic advantages.



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