The resumption of share sales may come as early as
the second quarter of the year, media reports said, quoting unnamed securities
So far several Hong Kong-listed mainland enterprises,
including top oil producer, PetroChina Co, announced plans to issue stock in
Among the other factors buoying optimism, analysts
said capital available for investment in yuan-denominated stock, including
contributions from mutual funds, insurers and foreign financial institutions, is
expected to jump this year.
The mainland's insurance companies may invest as much
as 150 billion yuan (US$18.6 billion) in the Shanghai and Shenzhen stock markets
this year, up from 84.6 billion yuan at the end of last year, according to an
estimate by China Life Insurance Co.
In addition, 25 finance firms controlled by
mainland's biggest state companies had 6 billion yuan eligible for securities
investments at the end of last year.
Overseas institutions have also been given more
access to yuan securities after the government said last year it would increase
the combined amount they can invest domestically to US$10 billion, up from an
initial limit of US$4 billion.
The mainland has issued a cumulative quota of US$5.6
billion to 31 foreign institutions including Swiss bank UBS AG, Deutsche Bank
and HSBC Holding Plc for investments in yuan-backed stock and bonds.
UBS, Europe's biggest bank, is applying for up to
US$500 million of additional quotas to invest in yuan securities, adding to its
current US$800 million, said Nicole Yuen, UBS's managing director and head of
"We've received overwhelming demand from clients (to
buy yuan-denominated securities)," said Yuen. "We'd like to apply for as much as
At the end of last year, UBS remained among the top
10 shareholders in 24 companies listed in Shanghai and Shenzhen, which include
industry bellwether Baoshan Iron & Steel Co and Shanghai Port Container Co.
One of the key reasons for the optimism by overseas
investors in mainland stock is a "closing valuation gap between mainland-listed
companies and Hong Kong-listed firms," said Credit Suisse China strategist
Vincent Chan. "You can find a smaller gap for bigger and better companies that
boast good investment value."
(Source: Shanghai Daily)