China Tries to Revamp Market But Runs Into a Large Obstacle
SHANGHAI -- Chinese government efforts to meet a year-end goal for completing a major restructuring of its stock markets were tripped up when three units of oil giant China Petroleum & Chemical Corp. said investors rejected plans to make their shares fully tradable.
The listed units of the oil conglomerate known as Sinopec -- Shanghai Petrochemical Co., Yizheng Chemical Fibre Co. and KingDream Public Ltd. -- said that minority shareholders rejected separate plans that would have offered stock-based compensation in exchange for letting each of the companies convert all equity into tradable stock.
Since last year, China's market regulators have been overhauling the share structure of listed companies in an effort to limit government influence in the markets and, ultimately, enhance shareholder value. The restructuring involves converting nontradable equity that is typically held by the government -- a legacy of the state's former total ownership of business -- into regular shares that can be traded on the market.
The overhaul has been a massive undertaking because as much as two-thirds of China's total market capitalization -- which totals $787 billion -- was in nontradable state shares when the restructuring program began in May 2005. The China Securities Regulatory Commission has repeatedly mentioned Dec. 31 as the completion date by which it expects all companies on Chinese stock exchanges to complete share restructuring.
So far, the process has unfolded relatively smoothly, despite grim predictions early on that it would send prices crashing because of fears that a flood of newly tradable stock would dilute the value of existing shares.
The use of lockup periods has stopped some shares from trading immediately, and China's markets so far have had their best year in a decade. The benchmark Shanghai Composite Index has soared 63% this year and finished yesterday at a five-year high of 1896.48.
Still, the work isn't done. Figures released this month showed that 1,184 listed companies, representing 90% of total market capitalization, had converted their shares. But 159 companies hadn't finished.
Sinopec is crucial to the success of the program, as its eight listed companies represent about 10% of total capitalization on China's stock markets. In the past year, Sinopec has taken four units private to simplify the restructuring program. But this week, minority investors in the remaining companies rejected the terms of compensation.
After this week's failure, the Sinopec companies must wait at least a month to propose a new plan to the shareholders.
Yesterday's Market Activity
European stock markets ended modestly lower as earnings-related gains from industrial conglomerate Siemens and others were offset by weakness from the pharmaceutical and financial arenas.
Asian markets closed broadly higher, with Hong Kong hitting a record close, while markets in Australia were hurt by concerns over rising interest rates and Japan suffered a setback on worries the economy may be decelerating.
In LONDON, the FTSE 100 declined 0.12% to 6231.5. Financial stocks fell after the Bank of England lifted its key interest rate to 5%. Pharmaceutical stocks continued to lose ground as investors feared that newly empowered Democrats in the U.S. Congress will seek to lower drug prices. AstraZeneca shares lost 2.8% and GlaxoSmithKline shed 1.3%.
In FRANKFURT, the German DAX Xetra 30 index rose 0.15% to 6358.68. Siemens gained 3.1% on higher profits and sales for fiscal 2006 and an increased dividend. Adidas fell 7.1% after the company lowered its profit outlook for 2007 on increased investment in recently acquired Reebok.
In TOKYO, the Nikkei Stock Average of 225 companies edged down 0.11% to 16198.57. Worse-than-expected bank-lending data was cited as fueling the selloff.
股权分置改革进入收官攻坚战
中国政府力求在今年年底之前完成股权分置改革的努力遭遇挫折：大型石化企业中国石化(China Petroleum & Chemical Corp.)的三家子公司表示，它们的股改方案均遭否决。
中国石化的这三家子公司分别是上海石化(Shanghai Petrochemical Co.)、仪征化纤(Yizheng Chemical Fibre Co.)和江汉石油钻头股份有限公司(KingDream Public Ltd.)。三家公司周四表示，它们为实现股票全流通而提出的股票补偿方案均被流通股股东否决。
去年以来，中国市场监管机构一直在推进上市公司的股权分置改革，希望以此来减少政府对市场的影响、进而最终实现提高股东价值的目标。股权分置改革指的是把通常由政府持有的非流通国有股转化为可以上市交易的流通股。
股权分置改革是一项浩大的工程，因为在2005年5月开始这项改革之际，非流通股占到了中国股市三分之二的市值。中国股市目前的市值为7,870亿美元。市场监管机构中国证监会(China Securities Regulatory Commission)多次发出通知表示希望所有的上市公司在今年年底之前都能完成股权分置改革。
尽管早先有人认为对非流通股转化为流通股将稀释原有股票价值的担心可能造成股市大跌，但目前为止这项改革还算进展得比较顺利。监管机构通过限定上市日期使得一些流通股不能即刻上市，目前为止可以说中国股市迎来了10年来最好的一个年景。上证综合指数今年以来已经上涨了63%，周四收于5年来的高点1896.48点。
但改革尚未完全成功。本月的数据显示，已有1,184家上市公司完成了股权分置改革，它们占到中国股市总市值的90%。不过，也还有159家尚未完成改革。
以备受瞩目的深发展(Shenzhen Development Bank Co.)为例，今年7月时该公司的股改方案即遭到流通股股东的否决。通用电气(General Electric Co.)拟出价1亿美元参股深发展的计划也就此搁置。深发展董事长法兰克?纽曼(Frank Newman)透露说，深发展的控股股东们正在研究如何对流通股股东做出妥协。深发展目前的管理方是美国私人资本运营公司TPG-Newbridge。
中国监管机构近期暗示可能会对未能及时完成股权分置改革的上市公司进行处罚。中国国有媒体的报导称，具体措施可能包括对此类公司进行限制交易，只允许集合竞价，并且每个交易日只允许做两次集合竞价交易。
中石化对于股权分置改革能否成功始终至关重要，这是因为中石化系8家上市公司的总体市值占到中国股市总市值的10%。过去一年来，中国石化为了简化股权分置改革，先后对4家子公司进行了收购。但在本周内，上述3家子公司的股改方案相继遭到否决。其中上海石化的股改方案是拟向A股流通股股东每10股送3.2股，作为对他们的补偿。
在股改方案本周被否之后，这三家公司至少要等上一个月才能提出新方案。富国基金管理公司(Fullgoal Fund Management Co.)的基金经理陈继武表示，股改方案未能达到我们的预期。富国基金管理公司至少持有上述三家股改公司中一家的股票。
分析人士称，股改方案未获通过使得中国石化的母公司更有可能通过全盘收购一家或多家上市子公司的方式来简化股改程序。在此憧憬的推动下，上海石化及仪征化纤的股价在周四上涨。但上海石化的发言人排除了被全盘收购的可能性。
James T. Areddy
