Companies

Beijing municipality to promote local IPOs

By Chen Jia (China Daily)
Updated: 2011-05-18 11:09

BEIJING - Beijing municipality is in talks with "several" large foreign equity investment institutions, and plans to jointly launch more private equity funds in mid-June 2011 to promote the listing of local companies, said an official with the Beijing Municipal Bureau of Financial Work.

The financial might of new equity funds is expected to exceed the previous 5 billion yuan ($769 million) fund that was jointly launched by the Beijing municipality and Goldman Sachs Group Inc, said Hao Gang, deputy director of the Financial Market Department of the bureau. But Hao declined to reveal the names of the foreign investment institutions.

Similar to the Goldman Sachs' yuan-denominated fund, the new private equity funds may mainly invest in restructuring projects of State-owned companies and support firms in emerging industries, including high-tech and new energy, according to Hao.

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"Launching private equity funds with foreign partners will help to employ advanced management measures and promote more local enterprises to list on stock exchanges," said Shen Hong, a spokesman with the Beijing Municipal Bureau of Financial Work.

Beijing municipality signed an agreement with Goldman Sachs to established a yuan-denominated private equity fund on April 12, to mainly invest in State-owned companies.

Other international investment institutions such as Carlyle Group and Blackstone Group LP have set up yuan-denominated funds.

In the first quarter of this year, the number of Beijing-registered venture capital and private equity investment institutions from both domestic and foreign fund owners increased to 538 from 511. They manage 1.04 trillion yuan, according to a statement from the Beijing financial bureau.

Zhu Yuanguang, deputy director of the Beijing Municipal Bureau of Financial Work, said that the China Securities Regulatory Commission has approved five Beijing-based companies, which are now awaiting a listing on the stock exchanges in China.

Since the start of this year, 14 companies in Beijing had floated on the A-share market. Among these were three companies listed on Shenzhen's SME (small and medium enterprises) board, and nine companies that were listed on ChiNext, the bureau's statement said.

The increased rate of newly listed companies in Beijing is the fastest in the country, said Zhu.

Beijing municipality plans to list more than 100 new companies on the domestic stock exchanges during the period of the 12th Five-Year Plan (2011-2015), according to the bureau.

As part of the plan, the local authority will further promote the IPO issuance of State-owned companies and accelerate the asset securitization process.