A LINE-UP of infrastructure companies seeking B-share listings is at the forefront of forceful comeback plans by the Shenzhen stock exchange, which is keen to revitalise its tarnished image among foreign investors. Exchange general manager Xia Bin said the new listings were one of the trump cards to be played by the exchange and securities authorities. 'We now have on the exchange a glut of light industrial and property counters, stocks with low liquidity and which lack a diversified shareholder base,' Mr Xia said. 'We reckon that there is a need to readjust the selection of listed companies.' He said the introduction of heavy industrial companies and infrastructure stocks to the exchange would help meet the demands of foreign investors and maintain a more balanced portfolio of stocks. 'Priorities will also be given to companies that have a considerable market share in their respective fields,' he said. Mr Xia said Nanshan Power Station's offer would be followed by Lianyuan Iron and Steel, Guangdong Power and Foshan Lighting and Electrical by the end of next month. Last week, power-plant operator Nanshan Power awakened the much-maligned stock market with a $146.15 million offer of B shares. Response so far is encouraging, with the issue's international co-ordinator, Wardley Corporate Finance, receiving 'a demand several times the shares offered in the placement'. Mr Xia said: 'The upcoming B-share companies are all best players in their respective sectors. They will add life to the Shenzhen B share market. I'm optimistic.' Also lining up for listings include a car-maker, a wielding manufacturer, a fibre-board maker and a meat processor, all commanding a high market share in their respective sectors. Another challenge Mr Xia faces is to change the widely-held perception among foreigners that the Shenzhen stock market was relatively sub-standard and inefficient. 'Foreign investors have been inclined to believe that the Shanghai stock market is better than Shenzhen's in every aspect. This viewpoint is totally unjustified in some cases,' he said. Mr Xia referred to a three-month study by a Hong Kong brokerage which showed that investing in the Shenzhen B share market offered a higher return than in Shanghai's during a certain time frame. 'Foreigners tend to take Shenzhen as a small special economic zone. So when I tell them that Shenzhen recorded the highest cargo throughout in China, they think I'm kidding,' he said. 'That's the kind of misconception I'm talking about.' He said the attractiveness of the Shenzhen stock market was discovered instead by mainland companies which rushed to file applications to list B shares in Shenzhen. 'Already, more than 10 companies are preparing to issue B shares in Shenzhen after Beijing allowed companies other than Shanghai and Shenzhen to issue B shares,' he said. Mr Xia said he assumed the establishment of a central clearing company would be another step forward. A Shenzhen listing division official said the perception of the exchange between Hong Kong and mainland investors differed radically. 'In other mainland cities, people consider Shenzhen the same as Hong Kong. When you tell them you are from Shenzhen, they'll envy you,' he said. 'No wonder. Shenzhen is an attractive city. Its proximity to Hong Kong allows it to mirror Hong Kong. People are always astonished at the way Shenzhen enterprises are run and their scale. 'They are also inspired by the way Shenzhen people think. Shenzhen is a place that turns a company with four to five workers to a large corporation with national coverage. That's a miracle to most people. 'China Vanke and Shenzhen Gintian are good examples. You may argue that their businesses are less than appealing, but you can't deny they are taking a lead role in attempting new ways of operation for listed companies. That's a great insight to enterprises.' He said most enterprise would prefer to list in Shenzhen than Shanghai because they wanted to learn the most up-to-date management techniques and expertise.
