Home
News
In Focus
Business
Metro
Nation
World
Sports
Feature
Opinion
View more »Opinion Columns
Wan LixinOpinion deputy editor of Shanghai Daily
Restaurants get off to a quick start thanks to game-changing policies
High service charges on event ticket refunds call for further regulation
Sunday
- Subscribe
Related News
Regulator to probe SOE's financial derivatives' exposure
By Winny Wang |
May 6, 2009, Wednesday
|
Online Edition
Online Edition
CHINA'S state-owned asset regulator will launch an investigation into centrally administrated state-owned enterprises' investments in the financial sector and help them avoid risks.
A total of 28 SOEs, including Air China, China Eastern Airlines and China COSCO Holdings Co Ltd, have invested in financial derivatives but most suffered losses.
SOEs should be aware that they are aimed at avoiding risks and saving costs rather than speculation when investing in financial derivatives, said Li Wei, vice minister of China's State-owned Asset Supervision and Administration Commission.
Air China had lost 7.5 billion yuan (US$1.09 billion) on fuel-hedging contracts by the end of last year and China Eastern's wrong-way bets on hedging dragged its revenue down 6.4 billion yuan.
Li said SOEs which planned to invest in financial derivatives must meet four requirements, including obeying hedging rules, recruiting financial institutions for consultation and controlling risks.
"SOEs, mainly dealing in production, are short of financial talent to deal in such investments, which led to underestimation of risks and violations, so the commission will issue suggestions to help these companies after an investigation," Li said.
He also urged local state-asset regulators to investigate locally administrated state-owned enterprises.
Chinese SOEs reported the first annual fall in profit last year since 2002, tumbling more than 30 percent from a year earlier to 665.29 billion yuan.
The commission plans to put a supervision system into use by the end of this year to monitor share transfers of SOEs, Li said.
He added that all share transfers should be listed for trading in equity exchanges and the country will further develop a unified transaction system in four exchanges in Beijing, Tianjin, Shanghai and Chongqing.
A total of 28 SOEs, including Air China, China Eastern Airlines and China COSCO Holdings Co Ltd, have invested in financial derivatives but most suffered losses.
SOEs should be aware that they are aimed at avoiding risks and saving costs rather than speculation when investing in financial derivatives, said Li Wei, vice minister of China's State-owned Asset Supervision and Administration Commission.
Air China had lost 7.5 billion yuan (US$1.09 billion) on fuel-hedging contracts by the end of last year and China Eastern's wrong-way bets on hedging dragged its revenue down 6.4 billion yuan.
Li said SOEs which planned to invest in financial derivatives must meet four requirements, including obeying hedging rules, recruiting financial institutions for consultation and controlling risks.
"SOEs, mainly dealing in production, are short of financial talent to deal in such investments, which led to underestimation of risks and violations, so the commission will issue suggestions to help these companies after an investigation," Li said.
He also urged local state-asset regulators to investigate locally administrated state-owned enterprises.
Chinese SOEs reported the first annual fall in profit last year since 2002, tumbling more than 30 percent from a year earlier to 665.29 billion yuan.
The commission plans to put a supervision system into use by the end of this year to monitor share transfers of SOEs, Li said.
He added that all share transfers should be listed for trading in equity exchanges and the country will further develop a unified transaction system in four exchanges in Beijing, Tianjin, Shanghai and Chongqing.
- About Us
- |
- Terms of Use
- |
-
RSS - |
- Privacy Policy
- |
- Contact Us
- |
- Shanghai Call Center: 962288
- |
- Tip-off hotline: 52920043
- 沪ICP证：沪ICP备05050403号-1
- |
- 互联网新闻信息服务许可证：31120180004
- |
- 网络视听许可证：0909346
- |
- 广播电视节目制作许可证：沪字第354号
- |
- 增值电信业务经营许可证：沪B2-20120012
Copyright © 1999- Shanghai Daily. All rights reserved.Preferably viewed with Internet Explorer 8 or newer browsers.
