China must boost battered valuations of SOEs, says Shanghai Stock Exchange general manager in proposal to ‘two sessions’
- The undervaluation of state-owned enterprises risks eroding their ability to raise funds via the markets, says Cai Jianchun
- His bill urges the finance ministry and the securities regulator to help SOEs tap the capital market for fundraising
Listed SOEs now trade at an average 14 per cent discount to book value, while the broader market is valued at a 60 per cent premium to net-asset value, Cai Jianchun told journalists in Beijing, according to media reports.
Elected as a delegate to the Chinese People’s Political Consultative Conference (CPPCC) for the first time, Cai also proposed an intensified crackdown on accounting fraud and the inclusion of index-based funds in the investment portfolios of pension funds.
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He is the latest senior regulator to address the battered valuations of SOEs, particularly those controlled by the central government with the company name typically starting with “China”.