Wednesday, June 17, 2009

China ready to reopen stock market

June 17, 2009 - By Bloomberg Beijing

Everbright Securities, Zunyi Titanium and Sichuan Expressway may be among the first companies to sell shares publicly in China since September, as the government prepares to reopen what was the world's second-largest equity fundraising market in 2007.

The three firms were working on final documents required for regulatory approval to offer stock in Shanghai or Shenzhen, three people with knowledge of the matter said yesterday.

The China Securities Regulatory Commission (CSRC) stopped allowing public offerings in September after the Shanghai Composite index fell almost 60 percent in the first nine months of last year.

The benchmark has gained 34 percent since September 11, when Jiangsu Huachang Chemical became the last company to sell shares on the mainland.

"Current liquidity conditions can support share sales," said Yi Yangfang, an investment director at GF Fund Management in Guangzhou, which manages about 78 billion yuan (R65.9bn).

Chinese businesses may raise as much as 170 billion yuan in local equity offerings in the second half, according to Guotai Junan Securities.

Thirty-two firms, including China State Construction Engineering, have passed hearings at the CSRC's listing panel, the penultimate step in the process of getting stock sale approvals, according to the regulator. Those sales may collect a combined 70 billion yuan, according to Guotai Junan.

The Shanghai Composite index declined 0.48 percent to 2 776.02 yesterday. The index has advanced 52 percent this year, the third-best equity market in Asia, after India.

Everbright Securities is China's eleventh-biggest brokerage by assets. Zunyi Titanium is the largest producer of titanium sponge in the country. Sichuan Express, whose shares already trade in Hong Kong, operates toll roads, bridges and tunnels in China. The stock has jumped 44 percent in the past year.