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Morgan Stanley: China SOEs to Raise US$20 Billion Overseas
Morgan Stanley says that the phenomenon of Chinese state-owned enterprises (SOE) undergoing restructuring and going public is an irreversible trend. It predicts that this year, China's SOEs will raise US$20 billion from overseas markets.
Not long ago, Morgan Stanley recommended that China Unicom list on the US and Hong Kong stock exchanges. Wu Zhanggen, managing director of Morgan Stanley Asia-Pacific, says that China Unicom's successful listing on the overseas markets and the enthusiastic response it received reflects investors' support for China's telecom market. He says that China Unicom was able to go public because of the following reasons: 1) the Chinese government supported China Unicom's restructuring efforts; 2) after the management shakeup in China Unicom, the new leaders took the reins of the company's development and 3) China Unicom was able to work together with intermediary organizations. China Unicom's IPO has set the example for other SOEs who aspire to go public overseas. At the same time, it has also sparked interest in listing overseas among SOEs.
After China joins the WTO, China will need to join the global economy and it will need its own multinational companies. Restructuring large-scale SOEs and having them go public is a major step towards developing China's multinational companies. Currently, there is a lot of interest in telecommunications and high tech industries in the international markets, but this does not mean that companies in other sectors will not have opportunities to go public. Different investors are interested in different things at different times. Thus, China's large SOEs still have the potential to go public overseas.
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