Date
23 September 2017
Institutional Investor's Allen Cheng says Chinese SOEs are communicating more with investors than ever before. Photos: Xinhua, EJ Insight
Institutional Investor's Allen Cheng says Chinese SOEs are communicating more with investors than ever before. Photos: Xinhua, EJ Insight

China SOEs boost transparency amid focus on outbound investments

China’s state-owned enterprises (SOEs) are stepping up efforts to enhance their transparency as they target more investment opportunities overseas, the Institutional Investor said.

“These state firms are increasingly focusing on outbound investments, prompting them to give more importance to disclosure,” the business magazine’s Asia bureau chief Allen Cheng said, citing the results of a recent survey of investment professionals.

These companies are communicating more with investors than ever before as they have recognized the importance of perception and credibility in today’s global investment, Cheng said.

At the same time, global investors are shifting their focus to Asia, particularly China, due to a lack of high-return targets in the rest of the world.

This trend will also help improve transparency in China’s SOEs over the long run, he said.

For the survey the Institutional Investor interviewed 1,394 investment professionals, including analysts from 582 financial institutions who collectively manage US$963 billion in Asia ex-Japan equities.

The respondents said many Chinese SOEs are recruiting younger investment managers who understand the western culture to improve their transparency.

Many of these managers are based in Hong Kong, showing the important role that the Asian financial hub can contribute to help Chinese firms boost their transparency, Cheng said.

It takes time for these firms to improve their transparency in order to meet global standards, he added.

The Institutional Investor cited China State Construction International Holdings (03311.HK) as an example of a Chinese SOE that can beat global companies in the field of investor relations.

Other companies that performed well in investor relations include Kerry Logistics Network (00636.HK), MGM China Holdings (02282.HK) and Taiwan Semiconductor Manufacturing Corp., according to the survey.

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Intern reporter at EJ Insight

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