Flock — The web browser for you and your friends
I’m experimenting with yet another browser. This one is called Flock. It claims to be a “social browser” and looks extremely promising. As you’re surfing, a right-click (apparently on anything, like this graphic from their home page) brings up an option to “Blog This.”Blogged with Flock
The AFL-CIO, the American labor union federation, has filed a complaint against Chinese labor practices.
The full petition is here in a PDF format. An AFL-CIO web page with links to sections of the petition and additional material about the union’s efforts to save “US jobs” and help “our Chinese brothers and sisters” is here.
The complaint is submitted under Section 301 of the Trade Act of 1974. The Bush Administration has 45 days to respond to the petition. It rejected a similar one two years ago. It will do so again.
I am going to read the AFL-CIO petition, but I already know I agree with the AFL-CIO that Chinese workers need stronger rights. Chinese workers cannot organize independent labor unions. This in a so-called communist country. That ain’t right.
No doubt many Chinese workers are abused and exploited.
NGO and consumer pressure can be enormously helpful in boosting good labor practices, so it is great that the AFL-CIO wants to help its “Chinese brothers and sisters.”
But will improving workers’ rights in China overcome the economic logic that causes some types of jobs to move to China?
No.
The “Chinese brothers and sisters” most in need of help (and brothers and sisters in Africa and other poor parts of the world) are often the ones still down on the farms, where there’s little cash income and, even in ostensibly socialist China, no social security system or substantial government help for the teeming masses.
China (and India) will have vast amounts of cheap labor even with vastly improved worker’s rights. Cheap Chinese-made stuff will continue to find willing buyers.
In my experience multi-national corporations run some of the safest, cleanest factories in China (and many try to police their suppliers, too).
Many foreign investors (direct and otherwise) profit enormously from the differences between China’s low costs and high prices in the rich countries.
Is the overall process yielding improved living standards in the world (in both richer and poorer countries), or is it going to drag us all down to an abysmal Chinese per capita income level? I expect and obviously hope for the former, but I’ll admit my optimism is somewhat predicated on faith. But I am sure I trust markets more than I trust government planners and vested interests (capital or labor) to deliver a better world.
Clearly, as this transformation continues to move forward, the externalities, as the economists like to say, are going to cause all kinds of frictions. James Kynge, former head of the Financial Times‘ bureau in Beijing, has a worthwhile book out that contemplates just this subject—China Shakes the World: The Rise of a Hungry Nation).
A New York Times report on the AFL-CIO petition is here.
The Times story quotes someone who notes that the petition appears timed to affect upcoming mid-term Congressional elections.
The China Labor Watch blog (blocked, of course, in China), is a wealth of information on the struggle of PRC workers.
This article from the China Business Review also contains helpful information and links.
China’s intake of foreign direct investment (FDI) last year was even larger than first thought, once you take account of the nearly US$ 12 billion in investment in the financial sector (banking, securities and insurance), according to Vice Minister of Commerce Ma Xiuhong.
A China Daily story in English on revision of the FDI stats is here; a Chinese version is here.
Beijing-based China CAMC Engineering (中工国际 Zhong Gong Guoji), the first IPO out of the gate since the PRC mainland ended it’s year-long ban on IPOs, has been warmly welcomed by investors—it’s 576 times oversubscribed.
Historically shares in China do initially “pop” above their issuance prices. Those issuance prices are set, some would say artificially depressed, with “guidance” from the CSRC. Thus, investing in any mainland IPO usually guarantees a good return (hence the enthusiasm for subscribing to them). In fact, when China’s markets “violently fell” (暴跌, baodie) on Wednesday of this week, some blamed the fall on the announcement that the Bank of China was applying for an A-share listing or blamed other rumored IPOs. There idea is that everybody will sell shares (depressing prices) to raise capital to enter these IPO lotteries (you have to deposit cash in advance to have a shot at getting shares in an IPO).
China Daily reports on CAMC’s success here, and Mark O’Neil reports here on this and other recent market developments for the South China Morning Post (sub. required).
Last week I noted reports that CAMC and two other firms that will be among the first to list now that mainland China’s IPO drought is over.
Jamil Adnerlini reports in the South China Morning Post that China may liquidate or convert closed-end investment funds (which have set maturity dates but are publicly traded) to open-ended funds (which, like mutual funds, can take in new capital anytime and could go on forever). If true, this presents an arbitrage opportunity since most closed-end funds, as Adnerlini notes, “trade at an average discount of about 34 per cent to their net asset value.”
Any more questions about why they call China’s stock markets policy markets?
Fan Fuchun, a vice-chairman of the CSRC, says that looting of listed companies will become a crime when China’s Criminal Law is amended in the second half of this year.
Fan made the comments in a speech reported in the Chinese press here. The occasion was a training session for CEOs and board chairmen of listed companies.
As I’ve previously noted, the CSRC is campaigning to have misappropriated funds returned to listed companies.
The PRC Company Law as revised in 2005 allows for shareholder derivative suits. That might provide a civil remedy to augment the promised criminal remedy for looting by controlling shareholders, but the combination of 1) local government control of local courts and 2) local government ownership of listed firms may mitigate the efficacy of all these efforts.
The CSRC has issued new rules for it to follow when barring certain persons from the securities industry.
The rules allow people to be put in the penalty box for periods of 3-5 years, 5-10 years or receive lifelong banishment from the industry.
“Working in the securities industry” includes not only working for a broker, underwriter, fund or company providing services to the market (like a clearing and registration firm, for instance) but also working for a listed company as a member of the board of directors, board of supervisors or high-level executive.
The controlling shareholders and “actual control persons” of issuers, securities companies (meaning both brokers and investment banks in Chinese parlance) and service providers can be banned from the industry, too. And, following a ubiquitous drafting convention of PRC regulations, the CSRC adds to the list “any other lawbreakers we decide to add later.”
Following another convention of PRC drafting, the CSRC can impose the varying levels of punishment when it deems the circumstances of an infraction are “serious,” though the definition of “serious” is left to the sound discretion of the CSRC (the regs do spell out circumstances when lifelong bans or, conversely, leniency are appropriate).
The regs replace “provisional” regs on the same subject from 1997.
The reg is on the CSRC website here, but I’ll also put the full Chinese text after the jump.
China’s State Administration of Foreign Exchange (SAFE) has made it easier for PRC firms to get foreign exchange in order to expand abroad, according to this China Daily story.
This does not mean PRC firms can trade RMB for dollars to invest in US stock markets as financial investors. In other words, this is not a QDII program. What it means is that the next time a CNOOC wants to buy a Unocal (or a Legend wants part of IBM’s business) SAFE will (more easily) let the PRC firm access some of China’s vast foreign exchange reserves to fund the acquisition. It also means a PRC firm could trade RMB for hard currency to pay for an overseas office.
Given the global ambitions of some PRC firms and their interest in buying sources of raw materials, brand equity and other overseas assets, it is likely we’ll see more and more outbound PRC M&A activity.
However, the floodgates are not entirely open. SAFE rules on foreign exchange are only one layer of the rules governing outbound PRC investment. The PRC government will still play a role in shaping outbound capital flows in other ways.
Another issue will be the receptivity of jurisdictions where target companies are located. As the failure of the Dubai Ports and Unocal deals show (and the US government’s decision to be careful about Lenovo computers), perceptions of national interest can affect things on both sides of an M&A equation.
The new SAFE notice is here and a press release about it is here (all in Chinese). The notice is titled 国家外汇管理局关于调整部分境外投资外汇管理政策的通知 and it comes into effect July 1.
The US SEC has ended its inquiry concerning China Life’s IPO, a NYSE listing that raised US$ 3.5 billion in December 2003 (the world’s largest IPO that year).
Shortly after the IPO, the PRC’s National Audit Office determined a pre-IPO incarnation of China Life underpaid PRC taxes by a substantial amount. The national audit office investigation was apparently underway at the time of the IPO but was not disclosed by the listing vehicle.
As this article in the English-language China Daily notes, the SEC’s action does not end civil suits pending against China Life (however, in China that would effectively bar shareholder litigation against a listed firm for disclosure fraud because China requires an enabling administrative penalty before private litigants can proceed).
Whatever the outcome for China Life, it is noteworthy that since its listing (and the subsequent investigation and litigation over nondisclosure of its predecessor’s tax problems), all jumbo Chinese IPOs have avoided the US.
China Construction Bank (US$ 8 billion) and Bank of China (US$ 10 billion) have listed only in Hong Kong.
Deterring overseas issuers from accessing global capital markets through the US was not a goal of Sarbanes Oxley supporters (a group including, after Enron and Worldcom, virtually everyone in the US Congress), but it seems one consequence of SOX is that the largest PRC issuers are indeed avoiding the US.
US bankers, lawyers, accountants, regulators and stock exchange officials owners will no doubt note this when lobbying for SOX reforms.
Monday of this week the People’s Daily carried a prominent editorial affirming (and exhorting everyone else to affirm) China’s commitment to the path of reform. This has been interpreted as a way to end debates that have raged about the pace, scope and manner of China’s reformist agenda. In other words, the Party’s main mouthpiece has said, shut up already with your neo-leftist and other contrarian strains of discourse; China will stick to a pro-growth, pro-market, “socialism with Chinese characteristics” path.
For some time Western media have been reporting on vigorous internal Party debates (such debates should be a good thing, right?). This editorial has been covered as a public admission and simultaneously as a suppression of those debates. See for example coverage from the Financial Times here and the Times of London here.
I was struck by this sentence from the Times coverage:
Nostalgia is widespread for the days of Chairman Mao Zedong when everyone was equally poor.
Right. Back when nobody had anything, back when we sometimes tortured people for keeping a few chickens at home in an effort to raise themselves above communal misery. Those were the days!
The Hu-Wen administration has shifted rhetoric and perhaps some policies to a more “people-centered” (yi ren wei ben) approach that emphasizes the overall quality rather than mere quantity of growth. The editorial doesn’t change that. It simply indicates China is sticking to 1) socialism, 2) reform and 3) balanced development. That agenda, like my own country’s current policies of spending feverishly while cutting taxes, is fraught with internal tensions. But as the Deng Xiaoping billboard in Shenzhen says, the basic line shouldn’t change in China for a long, long time.
The editorial is available in Chinese here. It’s headline reads 毫不动摇地坚持改革方向 (Haobu dongyao jianchi de gaige fangxiang), which, with some license, can be translated as, “Don’t even think about not continuing to reform.”
The People’s Daily website provides an English article about the editorial here (though not a full translation; maybe it’s like the Koran and cannot be translated).
The current issues of China’s Stock Market Trend Analysis Weekly (股市动态分析周刊 Gushi dongtai fenxi zhoukan) contains a livid criticism of Newbridge Capital, the controlling shareholder of Shenzhen Development Bank. The author is outraged that Shenzhen Development Bank proposes making all its shares tradeable (that it become a G-share
listed company) without paying “compensation” to current holders of tradeable shares.
A heavy nationalistic strain is involved in the outrage. The idea that American investors think they should be exempt from Chinese “law and policy” when operating in China infuriates the writer, apparently touching sensitive nerves about extra-territoriality from the colonial era.
Sure, in China investors play by Chinese rules. But I think in principle Newbridge is right to refuse to give some of its shares in the bank to other shareholders of the bank without compensation.
Xinhua reports in English on the SDB proposal here. According to the article SDB will pay holders of listed shares some cash if the bank’s share price actually drops significantly following the reform, or they pay-out will happen if the stock dramatically appreciates, but they will get nothing if the price stays within its current trading range. Shareholders will vote on the proposal by July 17 (one imagines the proposal will not pass). Here’s some additional background:
In China the government, in one guise or another, typically owns two-thirds of a listed firm; public shareholders hold the the other third.
Importantly, until an equity re-classification program began last year, all the governments shares (the controlling 2/3) were classified as illiquid (fei liutong gu). They could only be transferred in one-off, negotiated transactions (subject to requisite approvals), not sold on the exchanges like shares issued in IPOs and secondary offerings.
Last year, after a few disastrous prior attempts, China began reforming its share classification system. Although each company is free to come up with its own scheme, the normal deal is that holders of liquid (listed) shares get three “gift” shares for every ten shares they own—in exchange for agreeing that the government’s illiquid shares can become tradeable.
Companies representing about 80% of the market share of the Shanghai and Shenzhen stock exchanges have gotten through or at least begun this process. The rest are supposed to get through the process by the end of this year (once Sinopec joins the list, that alone should push the number above 90%).
Shenzhen Development Bank, as one of China’s domestically-listed firms, also needs to have its shareholding system re(de-)classified, to be converted to a G-share company (ticker symbols for companies that have been through the reform process are designated as G-share companies for gai, a Chinese word for change).
But Shenzhen Development Bank is a special case among China’s 1,300+ listed companies.
It is one of the few PRC listed companies to have substantial foreign investment.
It is the only PRC bank with a controlling foreign shareholder.
It is also unusual among PRC listcos in having a large public float—about 70% of its shares are already listed. This means a couple of things. First, it means the typical 3 for 10 deal would be a massive private to private wealth transfer. It would take shares from Newbridge and give them to current holders of SDB’s listed shares. Whatever one thinks about the PRC share reform scheme, this is simply a fact in this case. Second, SDB’s widely dispersed capital structure means that even under the normal PRC share reform logic SDB’s shareholders need less “compensation” because there is much less of an overhang of non-tradeable shares to flood the market and drive down the price of already-listed shares.
Newbridge acquired a controlling stake in Shenzhen Development Bank in 2004, before the shareholding reform program was announced.
Newbridge in its due diligence should have identified the possibility of shareholding reform as a potential issue (and I imagine they did). But there was no way they could have at the time of the acquisition known for sure if or when or in what manner the shareholding reform process would proceed. Further, it is not clear they would have had reason to expect that an eventual reform would amount to a government “taking” without compensation. (Actually, it’s more of a government-ordered giving, since the government is not directly taking for it’s own use—it’s more like the New London case in the U.S. than a typical government taking, minus of course the compensation).
Many people in China are glad that the shareholding reform process is moving forward. Removing the “share overhang” should be good for China’s stock markets in the long run.
But, in general, I have never understood what legally justifies the idea that the PRC government as a controlling shareholder has a duty to compensate holders of liquid shares—people who bought shares that could go up or down and who were to my knowledge given no assurances that the unlisted shares would stay that way.
More pointedly, in its (still formally) socialist system the PRC government holds state assets on behalf of the whole population, so in giving extra shares to current holders of tradeable shares, the government is transferring property from all the Chinese people to some portion of the Chinese people—people (or institutional investors) who bought shares (I note again without any assurances that they wouldn’t lose money or that the shares they weren’t buying wouldn’t become buyable). It may be good for the markets in the long run, but in principle it looks to me like asset stripping.
As for Newbridge in particular, why should they give their shares (their property) to the bank’s other shareholders without compensation?
They should be subject to Chinese law, but the Chinese Constitution ostensibly protects private property.
If the PRC government wants to buy off holders of tradeable shares, it shouldn’t do it with Newbridge’s money.
. . . If Newbridge finds itself squared off against its shareholders over this issue (making the “takings” arguments I outline above to a PRC judge), it won’t be the first hurdle they’ve faced since buying 18% of the bank. The deal fell apart rather publicly before it went through, and the first man they chose as CEO after the take-over lasted only 18 months.
Still, SDB is trading up now (quite a bit since Newbridge bought in), and if they do manage to make their shares tradeable they could reap some handsome profits, perhaps even without selling their controlling stake to another investor.
Yesterday the CSRC posted a prospectus for the Bank of China on its website.
Yes, BOC just listed in Hong Kong, but this prospectus is for a listing on the mainland’s A-share market—in other words, for shares that are inside China’s Great Wall of currency controls, whereas those in Hong Kong are outside the Great FOREX Wall.
Because of the PRC’s foreign exchange controls, PRC investors (banks, insurance companies, mutual funds, their national social security trust fund and of course individual retail investors), cannot freely buy shares in the BOC, even after its Hong Kong IPO. An A-share listing would fix this. It would also give BOC even more capital. No doubt it would also please a number of PRC bankers, lawyers, accountants and officials at the Shanghai Stock Exchange (where BOC will presumably list its A-shares).
BOC disclosed that it planned an A share issuance in its Hong Kong IPO materials. PRC press reports (like this Xinhua story in English) indicate the A-share listing could come quite soon.
BOC’s draft A-share prospectus is nearly 300 pages long. I’ve put the Chinese PDF file here. The CSRC copy is, for now, here.
The English prospectus for BOC’s Hong Kong IPO is here. The interesting Risk Factors section is here.
Today a New York Times article by Andrew Kramer notes the relative lack of success of Russian companies in conducting IPOs on global markets, contrasting this with China’s experience (including last month’s IPO in Hong Kong of the Bank of China which raised USD 9.7 billion, the world’s largest IPO in six years).
Quoting a report by Ilya V. Sherbovich from Deutsche Bank in Moscow, the Times observes:
Among emerging market economies, Russia was in eighth place last year in number of initial stock offerings, behind Israel and Poland. But measured by the value of stock issued, Russia, with $5.2 billion, was in second place behind China, with $19.4 billion, according to the report.
Note how far China as the number one emerging markets issuer is ahead of number two Russia—nearly four times!
One other striking paragraph indicates that enthusiasm for Russian IPOs was dampened when:
. . . an article in Forbes magazine quoted the chairman of the board of Kuzbassrazrezugol, a Siberian coal company with a stated goal of going public, explaining his management practices. They included threatening employees with death.
I don’t think many Chinese managers would brag about using death threats as a motivational tool, but it’s not clear to me that the other problems identified in the article as affecting Russian IPO candidates don’t equally affect PRC companies. The Times notes:
The shortfalls [of Russian IPOs] suggest that Russian companies are going public too early, for the wrong reasons, or are valuing their shares too high, critics say. Investors have also raised questions about the lack of transparency in accounting at some Russian companies and the shortfalls in corporate governance standards.
If these are the factors retarding Russian IPOs, should we assume the relatively greater success of PRC IPOs means Chinese firms have more financial transparency, better corporate governance and more conservative valuations than Russian companies? Um, I don’t know much about Russia, and one should not wholly discount the restructuring that occurs before PRC IPOs, but the notion that PRC firms offer dramatically better transparency and corporate governance than Russian firms seems counter-intuitive (four times better?).
Maybe the reason PRC issuers have hit home runs while many Russian ones aren’t even coming up to bat is more related to the perceived option value of the two countries. China has a bigger population and is perceived to have a tremendously positive overall growth and reform story. Russia is smaller and is perceived to have a less successful reform process, with lower overall growth prospects.
Today I went to the China Central Television (CCTV) station in Beijing to appear on Dialogue, a show on CCTV 9, China’s national English-language station.
The other guest was Ha Jiming, the chief economist for China International Capital Corporation (CICC), China’s leading investment bank.
I think the host wanted Dr. Ha and I to cross swords a bit. I passed up several chances to overtly disagree with him (he implied for instance that all countries require companies to be profitable to conduct IPOs and under-emphasized the degree of difference between the US and PRC regulatory regimes in other ways). Instead I tried to make a few points by playing off our larger areas of agreement. It made for a civil though I hope still fruitful exchange.
Dialogue provides oceans of time compared to most TV shows where you only get soundbites, but still the time flew by. It was all over when I felt like we were just getting started.
They taped about 50 minutes. It’s a 30-minute show, and they sometimes intersperse snippets of other interviews with the comments of the main guests, so I’m curious to see what will actually be broadcast. The show will probably air next week and should be available online once it does.
The Shanghai Stock Exchange has published guidance on its policies for IPOs, indicating it will generally arrange only one IPO per day—or two in “special circumstances.”
The market was down last week right before the resumption of IPOs (after a year hiatus). There is some concern that new listings will depress prices for existing securities, halting the bull market that has finally been building. The SHSE’s rule (and the way it is being portrayed in the PRC press) indicates they plan a measured approach to new listings. This may calm jitters about new IPOs killing the (fragile?) bull market.
These SHSE rules were no doubt approved by the CSRC, since the SHSE and Shenzhen Stock Exchanges are only nominally SROs.
The general IPO regulations for each exchange continue to be identical, and their listing standards are prescribed by law, not exchange regulation. So far there is still no regulatory competition (to attract more issuers and investors with different types of listing standards) between the SHSE and SZSE as there is between NYSE and Nasdaq (or US and European or other Asian markets).
The new SHSE IPO guidance is:
上海证券交易所首次公开发行新股发行和上市指引 [Shanghai Zhengquan Jiaoyisuo Shouci Gongkai Faxing Xin Gu Faxing he Shangshi Zhiyin]
I’ve pasted the full Chinese text of the guidance after the jump. The SHSE website has a rules and regulations section here, and it includes a link to the full text; however, the link is in a javascript format that I can’t paste here.
A Chinese Securities Journal report (in Chinese) on the new SHSE regs is here.
The general IPO regulations for both exchanges are the
首次公开发行股票并上市管理办法 [Shouci Gongkai Faxing Gupiao bing Shangshi Guanli Banfa]
This year for my MBA Doing Business in China travel course I again required teams of students to produce daily content for a course blog.
I continue to refine and learn about the best way to implement this assignment, but overall I think it is a useful addition to the course.
It builds a team component into their work—the other main assignments are individual papers and class participation. Unlike law school (which I attended), business schools emphasize team work. Last year I asked teams to produce pre-trip briefings on the various sectors we would explore. There was some benefit to that (it helped them get to know each other better before the trip, and I was relieved of the duty of lecturing for several hours). But since the students aren’t beginning with much background, the quality of the information they could provide wasn’t always superlative. So this year I did all of the pre-departure lecturing myself and let the blog assignment comprise the main teamwork component of the class.
Besides being a good teamwork exercise, the blog assignment also acquaints those students not yet familiar with blogs with the fearsome power and simplicity of push-button publishing (I’ve sometimes shown them how easily someone can create your-company-sucks.com to illustrate the principle).
My MBA and honors undergraduates students are wonderfully attentive and engaged during our meetings abroad (even on the days when they are not responsible for the blog), but nonetheless I think the blog assignment helps encourage an atmosphere of active participation. Listening to a presentation that is followed by a little Q&A feels different than approaching an event as something you must quickly (and publicly) report on. I like how the ethos to “get the story (and images) for the blog” heightens the sense of engagement.
In some travel courses I’ve assigned individual journals. I think there’s a lot of value in personal, reflective writing while traveling, but I don’t like the way individual journal assignments keep all students cloistered part of each day. During their precious time abroad I’d rather have them exploring our host city rather than sitting in their hotel rooms writing. The blog as a team project may not encourage as much individual daily reflection as journals, but it doesn’t require all students to write every day, thus freeing more of them to directly experience more things while abroad.
It has proven difficult to build into these travel courses time and computer/net/projector access to view the blog on a daily basis as a class. Some students are seeing the course blog at least some of the days (when they work on it, of course, or when they get online to check their email), but I think finding a way to present each day’s entry to the entire class would be good. It would help encourage each group to do a bang-up job, knowing their effort would be subject to nearly immediate peer review/ridicule. I try to comment on each previous day’s blog posts, but actually showing them to everyone would be preferable.
Based on my experience last year, I knew this year that I should make it explicit that a good blog entry is not one that tries to capture every word a speaker utters. I explicitly told the students I want short recaps, not transcripts or data dumps of someone’s typed notes. I also stressed that a good blog entry probably includes at least one picture. I also noted linking to the web sites of speakers we here from (or institutions we visit) is desirable. I also tried to explain that while good analysis and commentary will be rewarded, a more basic requirement is simply to cover the facts of an event (who spoke to us, where we went, what we heard or saw . . .).
One issue I found is that while I continue to use an older version of WordPress (with the IImage Browser plug-in for handling photos), WordPress 2.0 has photo insertion tools built in, but they are not, alas, very intuitive, and students tended to post either enormous, template-destroying photos or little postage stamp thumbnails that were indecipherable. The professor has to figure this problem, among others, in what is I think overall a net positive contributor to my travel classes.
China’s mainland exchanges suspended new listings last April. The IPO ban was intended to assure stability during the process of reforming the share classification system for already-listed companies. That process has advanced substantially. Reports indicate companies representing about 70% of the market’s total capitalization have already undergone share classification reform or have started the process. When big cap stocks like Sinopec join the list of “G-firms” (firms that have changed or gai their share classification), the percentage will be near 90%.
Thus last week China began allowing IPOs on its two mainland exchanges after more than a year hiatus.
The first firm to get a listing go-ahead was Beijing-based China CAMC Engineering (中工国际 Zhong Gong Guoji). It is a state-owned firm, suggesting that the resumption of IPOs doesn’t herald a new direction for China’s stock markets (on the other hand, these initial IPOs are a backlog of firms approved prior to the ban, so new IPO approvals could still, conceivably, go in a new direction more favorable to private firms).
Second will be Coship Electronics (同洲电子 Tong Zhou Dianzi).
Yunnan Salt and Chemical Company ( 云南盐化) is the third firm that will conduct an IPO since China’s domestic listings resumed.
By year-end non-tradeable (legal person and state-owned) shares of most listed firms will have been made, theoretically, tradeable. That’s an important step forward for China’s stock markets, though it remains unclear whether 1) any real privatization in existing listed firms will occur as a result and 2) if more private companies will be able to access capital markets now that the IPO ban is lifted.
The Shenzhen Stock Exchange must be particularly happy to see these initial listings coming its way. IPOs there have been sparse for even longer than the general IPO ban for the conversion of listed firms to G-share structures.
China Daily commentary on the resumption of IPOs is here and here.
