.jpg)
From September 1 to 19, all the 14 listed commercial banks on the Shanghai Stock Exchange (SSE) will successively hold an array of briefings on business performance during trading days. The unprecedented activity will boast its scale and concentration. An official of the SSE says that conditions will be continuously created for SSE-listed companies to enhance transparency and maintain investor relations. In light of investors’ needs, the SSE will guide SSE-listed companies to respond to concerns and remove information asymmetry, in a bid to enhance investors’ confidence.
The 14 listed banks include Industrial and Commercial Bank of China, China Construction Bank, Bank of China, Agricultural Bank of China, Bank of Communications, China Merchants Bank, China Minsheng Banking Corp., CITIC Bank, Industrial Bank, Shanghai Pudong Development Bank, China Everbright Bank, Bank of Beijing, Hua Xia Bank, and Bank of Nanjing.
The 14 SSE-listed Banks and the SSE fit in easily.
It is known that before release of 2014 semi-annual reports, some banks issuing both A shares and H shares asked the SSE whether they could hold briefings on business performance in China’s mainland by referring to their practices in Hong Kong. Upon study, the SSE held that it would be necessary to do this. Considering that under the prediction on the interest rate liberalization and the “New Normal” of the Chinese Macro-economy, the market and all walks of life had some common questions for the operation and development of the listed banks and some special questions for the operational modes of some listed banks. Thus, the SSE decided to solicit intentions of all the SSE-listed banks for holding briefings on business performance, with an aim of guiding the listed banks to enhance transparency, strengthen their talks with investors, and reveal all the truths. Surprisingly, all the 14 listed banks were willing to do this. According to the result of initial negotiation, the listed banks and the SSE decided to hold this activity after disclosing the semi-annual reports, with the relevant sites, technologies, and other supports to be provided by the SSE.
“We think that the listed banks’ briefings on business performance will come at a good time with great significance. Presently, a strong wait-and-see atmosphere prevails in the market, with the total market valuation standing at a low level. The stocks of the listed banks, the blue-chip board in the capital market, also see a low valuation. The SSE makes the briefings on business performance into a perfect platform for all the listed banks, investors, analysts, and media reporters to have in-depth talks on the issues concerned in the market, which will contribute to reducing doubts and worries in the market, elevating investors’ confidence, and propelling listed banks’ management on market capitalization”, says Du Jianglong, Secretary to Directorate of Bank of Communications.
The SSE: Vitalizing Blue Chips for Building the SHSECM
An official of the SSE says: “On the one hand, listed companies have a right to hold briefings on business performance. Investors are expected to rationally read the information to be released on the briefings and understand the ‘September’ series activity from the perspective of furthering talks. On the other hand, the activity is expected to show our resolution to fuel the building of the blue-chip market”. The official stresses that the SSE will continue to provide services in its power for the rationalized reinforcement and vitalization of the blue-chip market.
The official adds that while actively preparing for the SHSECM, all sides need to fully know about the SSE market. The concentrated display of the SSE-listed banks’ business performance in September shows the status of the listed bank board. “It is feasible to clearly understand the investment value of the SSE market from the listed bank board”, says he.
According to statistics, all the 14 listed banks are investment targets in the mechanism of Hong Kong’s investors buying stocks of SSE-listed companies, a part of the SHSECM. Although the number (14) of the SSE-listed banks accounts for less than 1.4% of the number of the total SSE-listed companies, the 14 listed banks’ total market capitalization is up to 21.81% of the total market capitalization of the SSE market, with the total floating market capitalization accounting for 23.25% of the total. As of August 27, the weighted average real price-earnings ratio of the 14 listed banks had been only 4.59 times, while the real price-earnings ratios of the SSE 50 Index, the SSE 180 Index, and the SSE 380 Index had been respectively 7.42 times, 8.2 times, and 20.86 times.
Recently, several securities dealers hold in their research reports that in a middle-and-long term, as the valuations of the stocks of the listed banks have dropped for 5 consecutive years, the valuations below net asset values have fully showed the worries about the bank assets in the market. In a short term, investment in stocks of banks will be mainly affected by the market sentiments.
“The listed banks’ briefings on business performance will exert a very positive influence on their talks with investors, and this activity will provide a base and a platform for value investing and rational investment”, says Xu Shiqing, Secretary to Directorate of China Merchants Bank.
All the relevant sides will participate in the briefings, and truths of the listed banks’ business performance will be revealed.
It was specified in the “Some Opinions of the State Council on Further Propelling Sound Growth of the Capital Market” that listed companies should be urged to fulfill the obligation of information disclosure according to investors’ needs, and the effectiveness of information disclosure should be strengthened; institutional investors, including securities investment funds, should be urged to attend business performance briefings of listed companies and exercise rights on behalf of public investors.
An official of the SSE introduces that the 14 listed banks and the SSE have made a lot of preparations to enhance pertinence and effectiveness of the briefings and facilitate the activity according to investors’ needs. Firstly, all the relevant sides were invited to attend the briefings. Apart from heads of the 14 listed banks, front-line analysts, researchers, and over 10 news media were invited to ensure the quality of talks and display the concerns of the market and the public. An analyst invited says that thanks to the concentrated briefings to be held, it will be easy to comprehensively, carefully, and comparably grasp the listed banks’ business performance, with the analyzing efficiency to be greatly elevated compared with analyzing one bank only. Secondly, a smooth channel for questions and suggestions has been provided. The SSE has issued the “Notice of Soliciting Investors’ Questions about Business Performance of SSE-listed Banks’ Semi-annual Reports”, and all the listed banks have released email addresses to solicit questions concerned by investors (please visit the webpage of the “SSE Roadshow Center” at http://roadshow.sseinfo.com) and seriously be prepared to give replies. Finally, text broadcasts will be given to stress the transparency of the briefings. Investors could visit the page of the “SSE Roadshow Center” of SSE InfoNet Ltd.
An analyst covering the banking industry says that the activity is expected to reveal truths of the listed banks’ business performance, so that investors can make rational judgments according to the truths.
It is introduced that since last year, the SSE has vigorously boosted roadshow forms of listed companies, such as briefings on business performance and explanation meetings, to respond to the concerns in the market and the society. In addition to the relevant activities held by listed companies, the SSE has required the listed companies widely concerned or reasonably questioned in the market to hold briefings. Since last year, the SSE has assisted listed companies in holding 242 roadshows, which has gained widespread praises.
