SHANGHAI - State-owned enterprises (SOEs) in Shanghai sold off 11 billion yuan ($1.67 billion) in assets and equities on the property-rights market in 2010, as the city stepped up efforts to improve efficiency and eliminate business overlaps among SOEs.
The amount accounted for one sixth of the total capital raised by Shanghai's SOEs on the financial markets in 2010, according to figures released by the Shanghai United Assets and Equity Exchange (SUAEE) over the Lunar New Year holiday, which ended on Wednesday.
The office of the Shanghai United Assets and Equity Exchange. State-owned enterprises in Shanghai sold off 11 billion yuan in assets and equities on the property-rights market in 2010. [Photo/China Daily]
The government-owned SUAEE is an integrated market for property rights, covering asset rights, creditor's rights, stock rights and intellectual property rights. It is open to all kinds of investors.
Meanwhile, the city's SOEs conducted 72 transactions during the year, injecting assets worth 23 billion yuan into their listed arms. The figure is up about 70 percent from 2009, said SUAEE.
The injections pushed the securitization rate of local SOEs to 30.5 percent at the end of 2010 from 25.4 percent a year earlier, according to Shanghai Municipal State-owned Assets Supervision and Administration Commission (SASAC).
The deals underscore Shanghai's plan for restructuring its SOEs which has been gaining traction since the municipal government issued guidelines in 2008.
"One of the aims of restructuring is to trim the government's presence in SOEs in competitive industries through share-listings and asset sales," said Lu Hongjun, president of the Shanghai Institute of International Finance.
"Making the SOEs public can bring in outside management experience, which will help to transform them from government agencies into modern companies and become more competitive," Lu said.
Yang Guoxing, director of the Shanghai Municipal SASAC, said in a meeting on Jan 13 that the city plans to raise the securitization rate of local SOEs to 35 percent in 2011 from 30.5 percent at the end of 2010.
"Shanghai will continue to push the listing of SOEs or their core assets, making the listing arms the main engine of growth for SOEs in Shanghai," Yang said.
By 2016, 90 percent of State-owned industrial conglomerates in Shanghai will go public entirely or will have their core assets listed, according to the Shanghai Municipal SASAC.
Lu, of the Shanghai Institute of International Finance, said reform of the salary system is essential for the city's SOEs to become more competitive.
"Salaries for high-end professionals in SOEs are relatively low compared with privately owned companies. Giving out bigger payrolls will help attract and hold talent. Talent is the source of development and restructure for any companies," Lu said.
