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The growing number of mergers and acquisitions in the domestic market has greatly boosted the Shanghai Assets and Equity Exchange (SAEE), experts said.
Through the exchange's transaction platform, more than 100 billion yuan (US$12 billion) worth of assets and equity transfer deals will be struck by the end of this year, a robust increase over last year's 75.8 billion yuan (US$9.2 billion), said Zhang Hailong, SAEE's president.
"We are in a promising sector, that's why we think such dynamic momentum is just a beginning," Zhang said.
Alongside market development, the need of enterprises to optimize resource allocations to maximize business returns will remain as the basis for the exchange, experts said.
In Shanghai alone, SAEE has so far seen over 250 billion yuan (US$30 billion) worth of assets and equity transactions signed since it opened in 1996.
The deals used to mainly involve tangible products such as manufacturing facilities. But now corporate stake transfers have become the dominant subject of these transactions.
An increasing number of private and foreign businesses are also turning to SAEE, which used to target primarily State-owned enterprises (SOEs), to handle mergers and acquisitions (M&A), Zhang said.
Statistics from SAEE show that non-State businesses, especially private companies, have accounted for over 50 per cent of the deals signed on the exchange.
By the end of this October, a total of 7.86 billion yuan (US$950 million) worth of foreign-business-involved deals had so far been sealed at SAEE, including nearly 3 billion yuan (US$362 million) worth of deals finalized during the first half of this year.
This domestic mergers and acquisitions spree over the past few years has been further pushed by China's entry into the World Trade Organization last December and its ongoing market liberalizations, analysts said.
According to Thomson Financial, China was Asia's most active market for M&As in the second quarter of 2002, with 155 transactions worth US$11.9 billion announced.
Shanghai, China's financial hub, earlier this month announced that overseas investors are encouraged to expand M&As on the local market.
(China Daily November 28, 2002)
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