China Bets on Blue-Chip IPOs To Lay Strong Market Foundation
BEIJING -- A spate of big initial public offerings is weighing heavily on China's domestic-stock indexes, but the blue-chip companies that are listing could lay the foundation for a healthier market -- and solid gains in Chinese share prices in coming years.
The benchmark stock index on China's main stock exchange in Shanghai has fallen about 9.5% since its peak in mid-July.
Investors have pulled their money out of already-listed shares as more than 20 domestic IPOs have raised some $6 billion for companies including Bank of China Ltd. and Daqin Railway.
Market watchers believe the companies now going public may well have better prospects than most of the stocks previously listed on Shanghai's exchange and its cousin in Shenzhen. Since lifting a yearlong ban on IPOs in May, regulators have deliberately fed the market with offerings by large and established companies, eschewing the poorly managed spinoffs from ailing state enterprises that have historically dominated the indexes.
That move could have huge ramifications. If China's stock market can shake its reputation as home to shoddy companies and shady trading practices, retail investors might start putting more of their savings into shares. Such a flood of capital could, in turn, drive long-term rises in share prices. Chinese households had about $1.94 trillion in bank savings at the end of June, several times the $540 billion market capitalization of the local-currency Class A share markets.
"When the infrastructure of the stock market improves, that money in the bank can drive the stock market to double or triple," says Winston Wenyan Ma, an investment banker and author of an English-language book on the Chinese stock market. Retail investors generally, he adds, "would like to be able to participate in the best companies."
In terms of quality, the worst listed companies in China tend to be those that started trading the earliest. Public information on 192 delisted and so-called "special treatment" stocks -- companies that regulators have named as being in financial trouble -- shows that more than 90% of them were listed before 2000, in the stock market's first decade. About one-fifth of the companies who listed domestically in the 1990s were eventually declared "ST" or delisted. A similar fate has befallen only a few of the companies listed since 2000.
The new listings reflect the government's desire for a core of blue-chip companies that can anchor the stock market and reflect the country's economic growth. That approach has been slow to take root in China. Stock-market listings have long been handed out as patronage to undistinguished companies with ties to local governments, while the biggest and best companies headed to overseas markets like Hong Kong, New York and London.
Regulators have tried before to get large-capitalization blue-chip stocks to go public on the domestic market. The $1.4 billion IPO of China Petroleum & Chemical in 2001, followed by the billion-dollar offerings of China Merchants Bank and China United Telecommunications in 2002, were early steps in that direction. But the trend couldn't gather momentum and proved short lived.
"There are actually some people in the market who opposed listing the large caps" because they feared a large supply of new shares would depress prices, says Zuo Xiaolei, chief economist at China Galaxy Securities. "Now they have seen that the large-cap blue chips have provided big returns to overseas investors."
Because of China's capital controls, most local investors have missed out on the gains in overseas-listed Chinese stocks such as PetroChina, which has risen more than sevenfold since its 2000 IPO, and China Life Insurance, which has more than doubled. Similarly, China's yuan-denominated Class A shares aren't easily accessible to foreign investors, though mutual funds and other big investors are allowed to buy limited amounts.
Now, more Chinese investors welcome bigger listed companies and like the way their cumbersome shareholding structures have been overhauled. Bank of China and coal transporter Daqin Railway set records for the size of their IPOs this year. Flag carrier Air China, already listed in Hong Kong, is selling shares domestically this week -- although it has scaled back its offering amid the recent round of investor jitters.
A jumbo offering is in the pipeline from Industrial & Commercial Bank of China, the country's biggest lender by assets, and other big companies like Datang International Power Generation and Industrial Bank are also planning domestic share sales.
Even with the boost from new listings, some caution is warranted, given the strong run the market has already had this year -- it is up about 34% since the start of 2006, despite the recent slump. Mr. Ma, the investment banker, notes that many blue-chip shares aren't cheap right now. For instance, Bank of China, which sold $2.5 billion in a domestic IPO in June, now trades at more than 20 times its 2005 earnings -- a rich premium to international banks, whose price-earnings ratios rarely break out of the low teens.
Though China's market is still prone to dramatic price swings, the improving quality of listed companies could bring more stability, especially if institutional investors play a bigger role. In theory, more blue-chip investment options will encourage insurers and pension funds to invest for the long term, helping form a bigger and more stable investor base that will in turn encourage more companies to go public.
"The increase in high-quality stocks helps the market develop in a virtuous circle," says Jiang Jianrong, an analyst at Shenyin & Wanguo Securities.
蓝筹股或为中国股市打下坚实基础
接踵而至的一系列大规模首次公开募股(IPO)给中国各主要股指造成了沉重压力，但正陆续上市的蓝筹股公司却有可能为中国股市的更健康发展打下基础，推动股市在未来数年稳步攀升。
自7月中旬达到高点以来，中国基准的上证综合指数已下跌了约9.5%。
由于要参与20多只新股的IPO，投资者纷纷将投在已上市股票上的资金抽出。包括中国银行(Bank of China Ltd.)和大秦铁路(Daqin Railway)在内的这些新股通过IPO已筹集了约60亿美元资金。
市场观察家们相信，与以往在上海证交所和深圳证交所上市的大多数企业相比，目前这批陆续上市的公司可能会有好得多的前景。自从今年5月重启了冻结达1年的IPO以来，中国政府监管机构有意安排那些规模大、业绩好的企业进军股市，而那些从境况不佳、管理不善的国企子公司则未能获得股市融资的机会，中国各主要股指以往的成份股公司大多是这类企业。
此举有可能产生重大影响。如果中国股市能够摆脱其上市公司质量差、股市交易不规范的恶名，散户投资者就有可能将更多资金投入股市。纷至沓来的资金相应地会推动股价出现长期上扬。截至6月末，中国的居民储蓄存款已经达到1.94万亿美元左右，是中国A股市场5,400亿美元总市值的好几倍。
投资银行家Winston Wenyan Ma说：“当股市的基本结构获得改善时，从银行存款中分流出来的资金会推动股市上涨一到两倍。”他还说，总体而言散户投资者“希望能够投资那些最优秀的企业。”
就企业质量而言，中国最差的上市公司往往是那些股票最早挂牌交易的企业。公开信息显示，192家被摘牌及被归入“特别处理”股(ST股)的上市公司中超过90%是在2000年以前上市的，即它们是在中国股市诞生的头10年成为上市企业的。归入ST股的公司就是被监管机构指明存在财务风险的企业。上世纪90年代在中国股市上市的企业中约有五分之一最终都被摘牌或归入ST股了。而在2000年以后上市的企业落得这一下场的并不多。
从最近新上市的这批企业可以看出，中国政府希望打造一个由能稳定股市、能反映中国经济增长现状的蓝筹股公司构成的股市核心。而政府的态度起初并不是这样的。曾经有相当长一段时间，那些业绩平平但却与地方政府关系密切的企业几乎占据了所有的上市名额，而国内那些规模最大、业绩最好的企业则纷纷前往香港、纽约和伦敦等海外市场上市。
政府监管机构以前也曾试图让大型蓝筹股公司在国内股市上市。中国石化(China Petroleum & Chemical)2001年时规模达14亿美元的IPO，以及招商银行(China Merchants Bank)和中国联通(China United Telecommunications) 2002年规模达10亿美元的IPO都是这方面的早期尝试。但这种趋势后劲不足，不久就消失了。
中国银河证券(China Galaxy Securities)的首席经济学家左小蕾说：“市场中确实有一些人反对让大型股公司上市，因为他们害怕大量增加的新股会压低股价。现在他们发现，大型蓝筹股向海外投资者提供了巨大回报。”
由于中国的资本控制，中国大多数投资者无法从中国石油(PetroChina)和中国人寿(China Life Insurance)等在海外上市的中国股票中获利。中国石油的股票自2000年上市以来已经上涨了6倍多，而中国人寿的股票上市以来也已上涨了一倍有余。同样地，外国人想投资中国以人民币计价的A股也不容易，虽然共同基金和其他大型投资者已获准限量购买这类股票。
目前，更多中国投资者对较大型上市公司表示了欢迎态度，并对它们大规模改革其股权结构的方式表示了赞赏。中国银行和煤炭运输企业大秦铁路今年进行的IPO在中国股市新股发行规模方面创下了历史最高纪录。已经在香港上市的中国最大航空公司中国国际航空公司(Air China)本周正面向中国大陆投资者发行股票，虽然它已因最近出现的这轮投资者恐慌而缩减了股票发行规模。
中国资产规模最大的银行中国工商银行(Industrial & Commercial Bank of China)即将开始规模巨大的新股发行，而大唐国际发电股份有限公司(Datang International Power Generation)和兴业银行股份有限公司(Industrial Bank)等大企业也计划在国内发行股票。
虽然有这些新股发行交易的推动，但鉴于中国股市今年已经实现的巨大涨幅(尽管近来表现低迷，但中国股市目前仍较年初时的水平高34%左右)，多一些谨慎也还是必要的。上文提及的那位投资银行家Winston Wenyan Ma指出，许多蓝筹股目前都已不便宜了。以今年6月通过IPO在国内市场发行了价值25亿美元股票的中国银行为例，其目前的股价已是它2005年每股收益的20多倍，这一本益比比许多跨国银行都要高，后者的本益比很少超过14倍。
虽然股价大幅波动仍然是中国股市的一个特征，但上市公司质量的改善则有可能为中国股市带来更大稳定性，特别是如果机构投资者能扮演更大角色的话。理论上说，有更多蓝筹股可供选择将鼓励保险公司和退休基金在股市进行长期投资，这有助于形成规模更大、更稳定的投资者基础，而这反过来又会鼓励更多企业选择上市。
申银万国证券(Shenyin & Wanguo Securities)的分析师蒋健蓉说，高质量股票的增加有助于股市形成良性循环。
Andrew Batson
