Shanghai Stock Exchange to hold roadshow on boosting SOE valuation

 

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The Shanghai Stock Exchange plans to hold the “Discovering Investment Value of Central Enterprises and Promoting the Valuation Return of Central Enterprises” business exchange meeting on May 11, according to an invitation letter circulating online.

The event is aimed at further exploring the establishment of a Chinese-style valuation system, guide the discovery of investment value of central government-administered state-owned enterprises (SOEs), and push the valuation of the SOEs back to reasonable levels, according to the letter.

The event has also shown on the list of roadshows on the official website of the Shanghai Stock Exchange.

Earlier this year, Yi Huiman, chairman of the China Securities Regulatory Commission, had said that China will explore ways to establish a capital market with Chinese characteristics so resources can be allocated more effectively.

SOEs are an important pillar of the country’s economy and play a pivotal role in the A-share market, but market valuation of some SOEs has been generally low and there is room to improve, analysts at China International Capital Corporation said.

Cai Jianchun, the general manager of the Shanghai bourse, had said that China should use a variety of capital-market tools such as funding and restructuring to boost the valuations of publicly traded SOEs.

This undervaluation risks eroding the ability of state-owned companiesto raise funds via the markets, which in turn destabilises the economy, he said.