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Strategies & Market Trends : Strictly: Drilling II -- Ignore unavailable to you. Want to Upgrade?

To: russwinter who wrote (6606)	1/19/2002 7:45:25 PM
From: t4texas	Respond to of 36161

ach so, thanks for the info on the grandfathered mineral rights of pcx.

To: russwinter who wrote (6606)	1/29/2002 1:16:49 AM
From: t4texas	Respond to of 36161

russwinter, just fyi on china's government owned/govt. controlled shares of publicly listed companies. consider this just fyi, because i have not done the due diligence on how much of ptr and ceo the govt. still owns. but i know it is way more than 50%. heck china changes its collective mind so much that this scheme may not happen, but something like this is going to happen over time. thus these companies are going to have very large secondaries (or sort of like insider lock up shares) coming to market sometime in the not too distant future, so i expect dilution over time. besides the accounting this is what i have been concerned about with chinese government controlled companies to date. this doesn't mean i don't own them now or won't own them in the future, but i know after some run up in their prices (or other circumstances) these dilutions are going to happen. this has been a big reason the chinese markets have been tanking hard this month. i note that it has not impacted ptr or ceo, and i am glad for that as i am still doing my own dd on these two companies. this is from the south china morning post. biz.scmp.com Tuesday, January 29, 2002 Sale fears hit mainland stocks Beijing plan to offload state holdings in listed firms seen as necessary reform but brings pain to domestic players PEGGY SITO The mainland's stock markets fell more than 6 per cent yesterday after Beijing unveiled plans to dispose of non-tradeable shares the Government holds in listed enterprises. Shanghai A shares fell 6.298 per cent, or 95.331 points, to 1,418.281 and Shenzhen A shares fell 6.523 per cent to 397.21 points. A shares are reserved for mainland investors. The B share market, which had been reserved for foreigners but opened to mainlanders in February last year, saw a bigger decline with Shanghai B shares falling 7.955 per cent to 126.23 points and Shenzhen B shares plunging 8.719 per cent to 188.75 points. The slump followed a weekend statement by market regulator, the China Securities Regulatory Commission (CSRC), that it planned to free trade in all non-tradeable state-held shares. The proposal is for phased share sales. Mainland authorities would allow investors to bid for non-tradeable state shares in state-owned enterprises. The measure is aimed at supporting the pension system by raising funds for the Social Security Fund. Beijing hopes the move will bring the mainland's fledgling stock markets into closer step with their international counterparts. It follows the suspension in October of a plan to sell-off state holdings equivalent to 10 per cent of the funds raised in all initial public offerings and secondary share issues. This scheme was suspended after fears it would flood the market with over-priced state shares drove down prices on stock markets. Two-thirds of China's US$500 billion market capitalisation is now non-flotable, held by the Government, state-owned organisations and corporations. Investors have long worried that any sell-down of state shares would sap investor funds. But the new proposal calls for a gradual sale and a lock-up period of up to three years after the non-tradeable shares are converted into tradeable shares. More-established firms with a longer operating history will proceed first. The CSRC said it would consider initially allowing only the sale of state shares in firms that have been listed for at least 10, 12 or 15 years. If the CSRC applies the criteria of a 10-year history as a listed company, the state would be able to float its shares in only 46 out of 1,200 listed firms. It would take the state until 2011 to complete the flotation of all its non-tradeable shares. A 15-year restriction would mean the Government would not be able to dispose of its non-tradeable shares before 2016. Economists said China's latest proposal to sell extensive state holdings in listed firms gradually was a necessary reform, but the sale would inevitably deal a blow to the domestic stock markets. Morgan Stanley chief economist Andy Xie Guoshong said: ''The lock-up measure will not provide any significant stability to the market. The market eventually will see the same size of supply due to the share sale and that is not welcomed by investors.'' It might delay the impact on the market but the outcome, which would be to greatly increase the supply of shares on the market, was the same, he said. Under the new plan, existing shareholders will be offered bonus shares or stock options to compensate for the sale of previously non-tradeable shares at an anticipated discount. But analysts said the compensation was insufficient to discourage existing shareholders from dumping their holdings. Mr Xie said Beijing should unveil a disposal timetable and details of how many shares it planned to sell in every listed company, in order to provide a clearer picture for investors and stabilise the markets. The CSRC said the finance ministry might transfer some state shares to the social security fund to manage, which would allow the Government to dispose of some of its shares without flooding the stock market. ''But it is a neutral proposal,'' said Professor Song Quoqing, of Peking University. Professor Song said the state had to determine a price at which it could sell its shares without hurting existing investors. It was difficult to estimate how much the market would be affected as the proposal was not yet finalised, he said.