Commission chooses trading centres
By Yang Cheng (China Daily)
Updated: 2004-04-03 09:01

The State-owned Assets Supervision and Administration Commission (SASAC) has selected asset and equity exchanges in Beijing, Shanghai and Tianjin as key traders for the equity of big State-owned enterprises (SOEs).

At present, the trio are vying with each other to seek foreign co-operation. Citibank and Morgan Stanley are among the foreign financing institutions showing interest.

The foreign companies want to use the exchanges to acquire the assets and equities of local enterprises.

Large SOEs under the supervision and administration of SASAC can choose any of the three exchanges to conduct deals.

According to SASAC's newly-released regulations, all relevant trading must be conducted openly and transparently in the appointed exchanges in a bid to allow public supervision.

The first-round of deals involving the equity of large SOEs is yet to begin, but the local exchanges are competing fiercely to attract clients.

Analysts say the financing resources and service standards offered by the different exchanges become important factors for the enterprises when making their decisions.

Observers say the three exchanges each has their own advantages.

For example, the China Beijing Equity Exchange is the only platform for equity trading in the national capital, while 140 enterprises out of the 185 SOEs under SASAC's supervision and administration are located in the city.

"The Beijing Equity Exchange is taking real steps to improve its service and expand its investment channels," said Qiu Zifan, a senior executive at the exchange.

"We have established a strategic partnership with the Beijing Investment Promotion Bureau in a bid to lure more investment."

The total trading volume of equity transfer in Beijing is expected to hit 200 to 300 billion yuan (US$24.16 36.24 billion) in the coming three to five years, according to Xiong Yan, the exchange's president.

Likewise, the Shanghai United Assets Equity Exchange (SUAEE) and the Tianjin Property Right Trading Centre have also spared no efforts to sharpen their competitive edge.

The SUAEE handles a large trading volume in China, with a transaction volume exceeding 326.4 billion yuan (US$39.50 billion) last year.

And SUAEE recently listed about 180 new technology projects for investors, recording an historic high.

Tianjin's advantage lies in its 43 member exchanges in northern China.

"We will enlarge the space of the exchange centre from the present 2,000 square metres to 120,000 square metres with the opening of a new centre in the near future," said Guo Luan, president of the Tianjin Property Right Exchange Centre.

Its trading volume last year totalled 15.1 billion yuan (US$1.83 billion).