* China International Marine Containers seeks move to Hong
Hong bourse
* Plans to list through introduction without raising fresh
capital
* Dollar-denominated B share board lost relevance after
reforms
* Foreigners can buy shares via other routes
(Adds background on B-share market)
HONG KONG/SHANGHAI, Aug 15 (Reuters) – A Chinese
transportation firm has applied to become the first company to
migrate to the Hong Kong bourse, as mainland regulators
encourage companies to delist from China’s ailing B-share board.
The foreign currency denominated B-share market lost its
relevance years ago as a sole gateway for foreign investors due
to reforms implemented by China to allow firms to list overseas,
and the market has become increasingly illiquid and vulnerable
to speculation.
Chinese port investor and operator China Merchants Holdings
(International) Co Ltd said on Wednesday that its
Shenzhen-listed China International Marine Containers (Group) Co
Ltd (CIMC) plans to change the listing venue of its
B shares to Hong Kong by way of introduction without raising
fresh capital.
In a filing to the Hong Kong bourse, China Merchants said
CIMC plans to convert all 1.43 billion of its CIMC B shares into
H shares. The company, which makes containers, trailers, tank
equipment and port facilities, will retain its A share listing.
The conversion, if approved, will set an example for other B
share tickers on the Shenzhen exchange that are under regulatory
pressure to upgrade their ticker performance or exit the board.
Turning B shares into H shares through introduction will be
relatively easy because Shenzhen B shares are already
denominated in Hong Kong dollars. B shares of companies listed
in Shanghai are denominated in U.S. dollars.
The fact that mainland passport holders are allowed to own B
shares, yet are not allowed to directly trade Hong Kong
equities, complicates matters.
In a statement published on the Shenzhen Stock Exchange
website, CIMC said that it would offer shareholders the option
to cash out their existing B shares at the company’s closing
share price when it stopped trading on July 13 plus a 5 percent
premium, or HK$9.83 ($1.27) per share.
Regulators had created a problem for themselves when they
allowed domestic investors into the B share market, as it raised
prospects for a future merger into the A-share market.
Domestic speculators piled into the market on the belief
that B shares — which usually trade at a discount to A shares
issued by the same company — would pay off eventually when the
migration policy was implemented.
However, in 2012 the China Securities Regulatory Commission
(CSRC) began accelerating the delisting process for low-grade B
shares by establishing a “par value” standard for share prices
and minimum trading volumes.
The new policies put multiple B share tickers on the
Shenzhen exchange at risk of imminent delisting. Many have
suspended trading in their shares, effectively stopping the
clock that measures their share price performance.
($1 = 7.7570 Hong Kong dollars)
(Reporting by Donny Kwok and Pete Sweeney; Editing by Simon
Cameron-Moore)
