LexisNexis(TM) Academic - Document

Copyright 2005 The Financial Times Limited
Financial Times (London, England)

August 25, 2005 Thursday
Asia Edition 1

SECTION: ASIA-PACIFIC; Pg. 2

LENGTH: 676 words

HEADLINE: China commits to market overhaul SHAREHOLDER REFORMS:

BYLINE: By GEOFF DYER and FRANCESCO GUERRERA

DATELINE: SHANGHAI and HONG KONG

BODY:


Shang Fulin, the head of China's capital markets regulator, continued to show a deft political touch yesterday with the announcement that his plan to overhaul the stock market would continue full-steam ahead.

The statement from five government departments commits China to reforming the shareholder structure of all its 1,400 listed companies while leaving the tricky questions - in this case, compensation for Hong-Kong-based investors - for other people to decide.

The unwieldy structure of China's stock market has been a problem the authorities have been trying to deal with for several years. Regulators have long recognised that the fact that two thirds of the shares in listed companies are not actually traded contributes to regular abuses of minority shareholders and depresses equity prices.

Yet all previous attempts to resolve the issue have ended in defeat for the China Securities Regulatory Commission when the stock market slumped this year because of investor concerns about a flood of new shares on the stock exchange.

After launching a pilot programme allowing 46 companies to make all their shares tradeable, the CSRC has extended the scheme to the rest of the stock market.

Many details are still unclear but getting this far is an achievement for Mr Shang, whose tenure at the CSRC had been criticised for inaction until earlier this year. "The plan is a pragmatic response to certain interests in the market that would otherwise not have been willing to support the scheme," says Stephen Green, economist at Standard Chartered in Shanghai.

The main method of overcoming investor resistance has been a compensation plan. All but one of the companies in the pilot have offered new shares to holders of the tradeable stock to assuage their concerns.

This idea has come in for considerable criticism. Weijian Shan, a venture capitalist who is on the board of Baosteel, said the compensation plans were unconstitutional because they gave taxpayers' money to investors. Others have said they are another government effort to rig market sentiment.

But Mr Shang has fallen back on two responses. First, he says the offers of new shares are a decision of individual companies, not government edict. And rather than using the term compensation, he has described them as a fee for changing the terms of the companies' initial public offering prospectuses, which said the non-tradeable shares would not be listed.

Now Mr Shang has used a similar tactic to avoid another thorny issue - whether companies that have listed in Hong Kong and on the mainland should compensate overseas investors.

Holders of so-called H-shares have argued they should receive the same treatment as other classes of investors. However, the subject has been highly controversial because it would involve giving public funds to foreign investors.

One government official says there should be no compensation for H-shareholders because the listing circulars in Hong Kong - unlike those on the Shanghai exchange - made no commitment not to change the status of the non-tradeable shares. "There was no such agreement about the non-tradeable shares in Hong Kong," he says.

The CSRC solution to the dispute? Each company is to decide its own policy, says Mr Shang. Analysts say the result of this diplomatic answer is that no companies will compensate their H-shareholders but allows Mr Shang to avoid saying so.

While Mr Shang's fudges may have upset many observers who feel market principles are being abused, his reform plan has also created a level of confidence among some investors that has not been seen for several years.

After reaching an eight-year low two months ago, the Shanghai composite index has recovered some ground and a few investors believe that with the reform plan in place, the market has turned a corner.

"Investors have been discounting the increase in the supply (of shares) for years," says Frank Gong, head of China research at JPMorgan. "They now know what the solution will be and can focus on the fact that it will put the market on a much healthier footing."

LOAD-DATE: August 24, 2005

LexisNexis(TM) Academic - Document

Copyright 2005 The Financial Times Limited
Financial Times (London, England)

August 25, 2005 Thursday
London Edition 2

SECTION: THE AMERICAS & ASIA-PACIFIC; Pg. 8

LENGTH: 510 words

HEADLINE: China to free up trade in companies as it attempts to revive exchanges

BYLINE: By GEOFF DYER and FRANCESCO GUERRERA

DATELINE: SHANGHAI and HONG KONG

BODY:


China is to free up trading in all listed companies on mainland stock exchanges as part of a drive to revive the country's under-performing stock markets.

The government said yesterday that all 1,400 listed companies on mainland stock exchanges would be encouraged to change the status of their large holdings of non-tradeable shares so that they can be bought and sold, in a move intended to open the way to flotations and secondary share offerings.

In recent years China's stock market has slumped and it has played only a minor role in helping companies raise new capital.

In a joint announcement yesterday by five government departments, including the China Securities Regulatory Commission, the market regulator, the government said companies that had completed the reform of their shareholder structure would be given priority in raising new funds.

The initiative is designed to unwind the large number of shares of listed Chinese companies that cannot be traded on the exchanges - a principal cause, the regulator believes, of poor corporate governance and the drop in share prices in recent years.

The reform gives the government scope to reduce its stakes in many of the companies it controls and could facilitate future privatisations.

Officials also say the mainland stock markets will become much healthier because initial public offerings will no longer include non-tradeable shares.

However, the statement established no timetable for completing the reform.

Furthermore, it left open the question of whether holders of H-shares - Chinese companies with a listing in Hong Kong as well as the mainland - would receive compensation as part of the overhaul of share structures. Instead, individual companies are left to make their own decisions.

Although shareholders in the government's pilot programme were given some form of compensation for the increase in the number of listed shares, most observers said they did not expect holders of H-shares - in companies such as Tsingtao Brewery, China Eastern Airlines and Yanzhou Coal - to receive anything.

Nor will H-shareholders vote on the plans.

Analysts said the measures would help to clear the uncertainty that has dogged the country's equity markets for the past few years.

"This is exactly what the authorities need to do," said Frank Gong, head of China research at JPMorgan, the investment bank.

"We expect most of the companies to resolve the issue of non-tradeable shares by the end of this year."

Although many details are still unclear, getting this far is an achievement for Shang Fulin, head of the CSRC. His tenure had been criticised for inaction until earlier this year. "The plan is a pragmatic response to certain interests in the market that would otherwise not have been willing to support the scheme," says Stephen Green, economist at Standard Chartered in Shanghai.

The Shanghai composite index rose 1.5 per cent to 1,167 points on the news, although it is still 8 per cent down this year. Some investors believe that, with the reform plan in place, the market has turned a corner. Lex, Back Page

LOAD-DATE: August 24, 2005

LexisNexis(TM) Academic - Document

Financial Times (London, England)

August 25, 2005 Thursday
London Edition 2

SECTION: THE AMERICAS & ASIA-PACIFIC; Pg. 8

LENGTH: 510 words

HEADLINE: China to free up trade in companies as it attempts to revive exchanges

BYLINE: By GEOFF DYER and FRANCESCO GUERRERA

DATELINE: SHANGHAI and HONG KONG

BODY:


China is to free up trading in all listed companies on mainland stock exchanges as part of a drive to revive the country's under-performing stock markets.

The government said yesterday that all 1,400 listed companies on mainland stock exchanges would be encouraged to change the status of their large holdings of non-tradeable shares so that they can be bought and sold, in a move intended to open the way to flotations and secondary share offerings.

In recent years China's stock market has slumped and it has played only a minor role in helping companies raise new capital.

In a joint announcement yesterday by five government departments, including the China Securities Regulatory Commission, the market regulator, the government said companies that had completed the reform of their shareholder structure would be given priority in raising new funds.

The initiative is designed to unwind the large number of shares of listed Chinese companies that cannot be traded on the exchanges - a principal cause, the regulator believes, of poor corporate governance and the drop in share prices in recent years.

The reform gives the government scope to reduce its stakes in many of the companies it controls and could facilitate future privatisations.

Officials also say the mainland stock markets will become much healthier because initial public offerings will no longer include non-tradeable shares.

However, the statement established no timetable for completing the reform.

Furthermore, it left open the question of whether holders of H-shares - Chinese companies with a listing in Hong Kong as well as the mainland - would receive compensation as part of the overhaul of share structures. Instead, individual companies are left to make their own decisions.

Although shareholders in the government's pilot programme were given some form of compensation for the increase in the number of listed shares, most observers said they did not expect holders of H-shares - in companies such as Tsingtao Brewery, China Eastern Airlines and Yanzhou Coal - to receive anything.

Nor will H-shareholders vote on the plans.

Analysts said the measures would help to clear the uncertainty that has dogged the country's equity markets for the past few years.

"This is exactly what the authorities need to do," said Frank Gong, head of China research at JPMorgan, the investment bank.

"We expect most of the companies to resolve the issue of non-tradeable shares by the end of this year."

Although many details are still unclear, getting this far is an achievement for Shang Fulin, head of the CSRC. His tenure had been criticised for inaction until earlier this year. "The plan is a pragmatic response to certain interests in the market that would otherwise not have been willing to support the scheme," says Stephen Green, economist at Standard Chartered in Shanghai.

The Shanghai composite index rose 1.5 per cent to 1,167 points on the news, although it is still 8 per cent down this year. Some investors believe that, with the reform plan in place, the market has turned a corner. Lex, Back Page

LOAD-DATE: August 24, 2005

LexisNexis(TM) Academic - Document

Financial Times (London, England)

August 25, 2005 Thursday
Asia Edition 1

SECTION: ASIA-PACIFIC; Pg. 2

LENGTH: 676 words

HEADLINE: China commits to market overhaul SHAREHOLDER REFORMS:

BYLINE: By GEOFF DYER and FRANCESCO GUERRERA

DATELINE: SHANGHAI and HONG KONG

BODY:


Shang Fulin, the head of China's capital markets regulator, continued to show a deft political touch yesterday with the announcement that his plan to overhaul the stock market would continue full-steam ahead.

The statement from five government departments commits China to reforming the shareholder structure of all its 1,400 listed companies while leaving the tricky questions - in this case, compensation for Hong-Kong-based investors - for other people to decide.

The unwieldy structure of China's stock market has been a problem the authorities have been trying to deal with for several years. Regulators have long recognised that the fact that two thirds of the shares in listed companies are not actually traded contributes to regular abuses of minority shareholders and depresses equity prices.

Yet all previous attempts to resolve the issue have ended in defeat for the China Securities Regulatory Commission when the stock market slumped this year because of investor concerns about a flood of new shares on the stock exchange.

After launching a pilot programme allowing 46 companies to make all their shares tradeable, the CSRC has extended the scheme to the rest of the stock market.

Many details are still unclear but getting this far is an achievement for Mr Shang, whose tenure at the CSRC had been criticised for inaction until earlier this year. "The plan is a pragmatic response to certain interests in the market that would otherwise not have been willing to support the scheme," says Stephen Green, economist at Standard Chartered in Shanghai.

The main method of overcoming investor resistance has been a compensation plan. All but one of the companies in the pilot have offered new shares to holders of the tradeable stock to assuage their concerns.

This idea has come in for considerable criticism. Weijian Shan, a venture capitalist who is on the board of Baosteel, said the compensation plans were unconstitutional because they gave taxpayers' money to investors. Others have said they are another government effort to rig market sentiment.

But Mr Shang has fallen back on two responses. First, he says the offers of new shares are a decision of individual companies, not government edict. And rather than using the term compensation, he has described them as a fee for changing the terms of the companies' initial public offering prospectuses, which said the non-tradeable shares would not be listed.

Now Mr Shang has used a similar tactic to avoid another thorny issue - whether companies that have listed in Hong Kong and on the mainland should compensate overseas investors.

Holders of so-called H-shares have argued they should receive the same treatment as other classes of investors. However, the subject has been highly controversial because it would involve giving public funds to foreign investors.

One government official says there should be no compensation for H-shareholders because the listing circulars in Hong Kong - unlike those on the Shanghai exchange - made no commitment not to change the status of the non-tradeable shares. "There was no such agreement about the non-tradeable shares in Hong Kong," he says.

The CSRC solution to the dispute? Each company is to decide its own policy, says Mr Shang. Analysts say the result of this diplomatic answer is that no companies will compensate their H-shareholders but allows Mr Shang to avoid saying so.

While Mr Shang's fudges may have upset many observers who feel market principles are being abused, his reform plan has also created a level of confidence among some investors that has not been seen for several years.

After reaching an eight-year low two months ago, the Shanghai composite index has recovered some ground and a few investors believe that with the reform plan in place, the market has turned a corner.

"Investors have been discounting the increase in the supply (of shares) for years," says Frank Gong, head of China research at JPMorgan. "They now know what the solution will be and can focus on the fact that it will put the market on a much healthier footing."

LOAD-DATE: August 24, 2005

股权分置改革管理办法作出五处调整

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???-??-?????????:??????????�国资委股改指导意见：持股比例企业自己做主

2005年09月04日08:48 【字号 大 中 小】【留言】【论坛】【打印】【关闭】

　　“我们已把本地区国有控股上市公司的股改经验总结以及下一阶段的股改总体工作安排上报给中央国资委。他们将在总结各地区经验基础上，在9月8日前后出台国有控股上市公司股权分置改革的指导意见，内容将涉及国有股控股比例、国有股流通、对价原则、国资考核等各个方面。”安徽省国资委产权处的一位工作人员透露。

　　记者近日辗转获得的书面材料和采访结果，印证了这位工作人员的说法。

　　持股比例企业做主

　　8月23日，五部委《关于上市公司股权分置改革的指导意见》（以下简称“《指导意见》”）出台后，国资委的股改指引成为业界关注的下一个焦点。

　　《指导意见》中对于国有股的持股比例的要求为“根据国家关于国有经济布局和结构性调整的战略性要求，合理确定在所控股上市公司的最低持股比例。”国资委规划局有关人士透露，在国资委的指导意见书中对此将有明确说法。

　　该人士表示，国资委不会就某一行业的具体持股比例做出规定，而是由每个公司根据自己的具体情况，提出一个大概比例，再与所辖国资管理部门商榷确定。“这个比例不能定得太离谱，最终中央国资委仍要把握住大的原则。”

　　股权监管将出新招

　　在《指导意见》中要求，须按照有利于推进股权分置改革的原则调整和完善国资管理方面的规定，使之与股权分置改革相关政策衔接配套。

　　在最近的一次小规模内部会议上，国资委产权局有关领导已经提到了有关制度的实施部署。首先要开展上市公司国有股核查，弄清基本数据后才可能确定监管重点；其次要建立上市公司国有股监控信息系统。“国资委准备在中央和地方国资委之间开发一个实时沟通的系统软件，以便动态了解各地国有企业控股参股和数量、股份交易量和交易价格。”这位领导透露。

　　另据了解，国资委还将出台一系列配套措施。“这些措施若得到顺利实施，国资委股权监管工作将变得十分轻松。”一位中央企业负责人说，“但在整个国有控股公司治理结构体系还待完善以及证券市场仍存在缺陷情况下，股权管理难以真正实现市场化。”

　　股改策略两个调整

　　据悉，国资委股改策略的调整将主要体现在两个方面：对价方式以及股改技术环节安排。

　　对价方式方面，国资委部分官员认为，目前第一、第二批试点广泛采用送股等手段只是股改之初积聚人气的权益之计，在改革全面铺开后，对价过程中应该综合考虑公司基本面、市盈率水平、对流通股股东权益的保护程度、上市公司融资情况、非流通股股东的持股成本等多方面因素。

　　在股改技术环节方面，国资委在最近的一次内部会议中也做了新的安排，尤其强调股改要加强各地沟通。他们认为，第一、第二批试点中存在各地国有股东协调和沟通不够的情况，这样很容易产生问题：即两个不同地区、同一行业的上市公司，各自搞出两个差异很大的对价方案，这将对对价少的公司造成很大压力。下一步，国资委要在各地报送的方案当中做更多的协调工作，以确保同行业类型的公司有大致相同的对价水平。

　　来源：中国经营报