First Securities Firm Expected to Go Public

The Hongyuan Trust and Investment Company, Ltd., a publicly listed business in northwest China's Xinjiang Uygur Autonomous Region, may become China's first listed securities firm.

The company's board of directors announced that the China Securities Regulatory Commission (CSRC) has approved, in principle,its plan to restructure itself as a securities firm.

The firm, controlled by the China Xinda Trust and Investment Company, was listed on the Shenzhen Stock Exchange in 1994 as one of the few listed financial firms in China.

The 1999 interim report of the company showed that income from its securities business accounted for 78 percent of its operating income.

Starting early last year, the CSRC has given approval to some 15 securities companies to increase their equity capital, but securities firms want to go a step further and list themselves on the country's stock exchanges.

Late last year, the Chinese Ministry of Finance issued a regulation on the financial management of securities firms, which provides that they can issue stocks, thus removing the legal barriers to their listings.

China now has more than 900 firms listed on the stock exchanges in Shanghai and Shenzhen, but none of them are securities firms. Analysts say that allowing securities firms to go public will not only make them financially stronger, but will also attract diversified capital into the stock market, hence promoting the development of China's stock market and financial market.

According to media reports, Zhang Kejian, who is attending the ongoing Third Session of the Ninth National Committee of the Chinese People's Political Consultative Conference, the country's top advisory body, has made a proposal to the conference on the listing of securities firms.

It is learned that some of these firms have begun preparations for their listing.

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