SOEs seen suffering decline in market value

Of the 100 listed companies that have seen the most obvious share price declines in Chinese mainland capital markets this year, around 80 percent are State-owned enterprises (SOEs), a media report said Monday.

Among these 100 companies, 38 are SOEs under the State-owned Assets Supervision and Administration Commission, and have seen their combined share value fall by 1.3 trillion yuan ($214.37 billion), the Investor Journal Weekly newspaper reported, citing calculations by its research institution based on statistics from Wind Information Co, a Shanghai-based financial information provider.

Of all the listed SOEs, China Shenhua Energy Co and PetroChina Co saw their market value decline by the largest amount, with a fall of over 100 billion yuan each.

"The obvious decline in market value for the SOEs was mainly because these companies were listed during 2007, when the capital markets rose to a record high," Li Daxiao, director of research at Yingda Securities Co, told the Global Times Monday.

Five sectors in particular - coal, be-verages, mineral mining, nonferrous metals, and insurance - saw the most dramatic drop in market value, the report said.

The market value of coal enterprises listed on A-share markets declined by 40 percent, mainly because of a fall in coal prices this year, according to the report.

Analysts were cited by the newspaper as saying that reform of tax collection in the coal sector will lead to a rise in costs and a further decline in profits in the coal sector.

Specific reform plans were released in November last month following the four-day Third Plenary Session of the 18th Communist Party of China Central Committee. These included a change of the tax collection method in the coal sector, from one based on production volume to being based on sales value.

Three liquor firms including JiuGuiJiu Co saw a drop of 50 percent in their market value mainly due to the central government's crackdown on extravagant consumption by officials, the report said.

The total share value of companies on the two mainland stock exchanges in Shanghai and Shenzhen reached 23.39 trillion yuan by December 23 this year, 450.4 billion yuan more than at the beginning of this year, the report said.