Exchange hopes stake sale to conglomerate will help it attract more foreign investors
China Beijing Equity Exchange plans to sell a stake to state-owned conglomerate China Everbright Group to help it secure more foreign investors to buy projects put up for sale on the exchange.
The mainland's second-largest equity exchange may also seek a domestic listing, although no timetable had been drawn up, president Xiong Yan said.
'The talks [with Everbright Group] are in the final stages, we're still working out the details,' said Mr Xiong, who declined to provide more details.
Sources said Everbright Group would use unit China Everbright Investment Management Corp to buy a 10 per cent stake in the exchange.
Mr Xiong said Everbright Group's Hong Kong-listed financial services unit China Everbright would help the exchange find foreign investors that might be interested in projects on offer.
'Beijing Equity Exchange always has more than 10,000 projects available for sale, but the problem is there are not enough buyers, especially foreign companies,' he said.
'We want more foreign companies, including buyout firms, to buy projects through our platform and invigorate the market.'
The equity exchange, set up in February 2004 after the merger of Beijing Equity Exchange Centre and Zhongguancun Technology and Equity Exchange, completed 3,848 transactions worth 52.9 billion yuan last year.
However, only about 10 per cent of the buyers were foreign firms.
'Hong Kong is an international financial hub. With the help of China Everbright's network, we want to reach more potential buyers,' Mr Xiong said. 'We hope to build a bridge connecting foreign capital with enterprises in the mainland.'
The first batch of projects that China Everbright is helping market include a 10 per cent stake in Humen Bridge with a 600 million yuan minimum bid, a 100 per cent stake in Beijing Laifu Century Investment with a 346 million yuan minimum bid, and a 100 per cent stake in Shandong Arhua Healthcare Product with a 24.18 million yuan minimum bid.
The State-owned Assets Supervision and Administration Commission is the equity exchange's largest shareholder with a 43 per cent stake, Mr Xiong said.
Beijing Equity Exchange and the other three exchanges in Shanghai, Tianjin and Chongqing are designated as official transaction platforms for the 157 enterprises directly owned by the central government.
The Beijing exchange also serves as a trading platform for shares in other state-owned firms, intellectual property and innovative financial products, investments and financing for Zhongguancun-based technology companies, Mr Xiong said.
It charges a fee of 0.1 per cent to 3 per cent on the seller and buyer based on the transaction price.