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China’s Biggest Firms May See Ownership Shake-Up on Government Plan

  • Trial would allow state firms to float entire share capital
  • Ban was designed to stem capital flight, loss of state assets
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Some of China’s biggest companies may see a shake-up of their ownership structures if authorities follow through on reported plans to lift a ban on share sales by owners of state enterprises.

A trial that would raise or remove the limit on the public float of mainland companies listed in Hong Kong, known as H-shares, would mark another step in China’s push to open its markets and assets to foreigners. While the reported trial would only feature two companies, if fully enacted it would mean companies like Postal Savings Bank of China Co. and China Reinsurance (Group) Corp. could be permitted to issue all their shares in Hong Kong. In the case of Postal Bank, only shares accounting for $12 billion of the firm’s $48 billion market value are available to trade.