The Chinese central government has emphasised the need for market value management of listed state-owned enterprises (SOE’s) in the wake of far-reaching mixed-ownership reforms.
A teleconference of executives from the local branches of the State-owned Assets Supervision and Administration Commission (SASAC) held on 17 July has stressed the need for SOE’s to “pragmatically bear the primary responsibility of market value management, and strengthen dynamic monitoring, analysis and assessment of listed company operations.”
The meeting said that it would be necessary to support ongoing gains in the the quality and efficiency of listed company growth, while pointing to the possibility of boosting the value of loss-incurring listed concerns via methods including the merger of high-quality assets and the invigoration of resources.
“Strengthening market value management is the new requirement made of state-owned share-controlled listed companies,” said Zhou Lisha (周丽莎), a researcher with the SASAC Research Center, to Securities Daily.
According to Zhou the defects of the traditional “profit maximisation” business model have become increasingly pronounced following the development of China’s capital markets
Zhou said that the active promotion of market value management for state-owned listed companies would be of benefit to reducing the “short-term behaviour” created by the use of profit maximisation as a business goal.
“Strengthening market value management is of benefit to improving operations management, strengthening competitiveness, obtaining the long-term approval and support of investors, and achieving maintenance and growth of state-owned capital.”