Shaanxi to strengthen window before listing
Shaanxi provincial government plans to inject more assets into its window company in Hong Kong before applying for a listing on the Hong Kong stock exchange.
The northwestern province has urged Beijing to allow more companies from central and western regions to list shares on China's two exchanges as a proof of its commitment to support the region.
Shaanxi Province Securities Commission Office director Yue Renhua said Lishan Co, the province's company in Hong Kong, was not yet ready to be a red-chip company as its size and profits were too small.
'We are now in the initial planning stage [for its share issuance],' he said.
'We have to first change it to an industrial enterprise from a trading company.' His office had to decide what development direction the company should take, what kind of assets to be injected and be sure that the assets were of good quality, Mr Yue said.
Infrastructure projects such as energy and highways were the possible assets to be injected. Mr Yue said his office was speeding up the A-share listing preparations for the companies already approved for the year 1996.
'We hope to finish the preparations in the next few months,' he said.
'We can then show to the State Council that we have good enterprises and good preparations and ask them to give us more quotas [of listings] for 1997.' Beijing each year assigns a certain share issuance quota for each ministry or province.
Last year Shaanxi got four quotas, one of which went to Xian, its capital.
The latest quota will be announced by the end of the year and every ministry and province is lobbying for more quotas.
Officials from Shaanxi and other western provinces are looking for more quotas than last year's as Beijing has vowed to support development in the hinterland.
Mr Yue said his office was using three strategies to optimise the useage of the quota system.
'First, we have to choose the best enterprises for listing and do the best preparations,' he said.
The province would use other organisation's quotas. For example, the Golden Flower Pharmaceuticals Group based in Xian has got the 1996 A-share quota for All China Women's Federation to issue 30 million shares.
Aviation Industries of China has also agreed to let one of its subsidiaries, Xian Aircraft Co, to use one of its A-share quotas but it had not yet fixed the listing date, he said.
The third strategy was to explore enterprises with good profits and development potential to convince Beijing that the province deserved more share quotas.