(Yicai Global) Nov. 12 -- Companies listed in China have more than CNY500 billion (USD73.2 billion) in stock market investments, according to leading Chinese financial data provider Wind.
Some 147 listed firms, excluding large insurers, had securities holdings as of the end of the third quarter, the data showed. Many hope to spruce up their bottom line with the investments, but not all have proved so successful.
Shanghai RAAS Blood Products reported a year-to-date loss of CNY1.3 billion (USD187 million) at the end of the third quarter, despite turning a net profit of CNY408 million from its core business. Non-recurring losses included a CNY1.1 billion deficit in the value of shares it held.
The company plans to stop investing in the stock markets and cash out its holdings when appropriate, it said, choosing instead to focus on developing its main businesses.
Other firms are more optimistic, with several recently revealing plans to begin investing in securities or to top up their existing floated assets.
One of those is Chemical materials maker Honghui New Materials Technology, which announced yesterday that it would use CNY50 million in idle capital to invest in the stock market to better utilize its assets. The firm, which has not made similar investments before, plans to build a diversified portfolio of undervalued companies with bright prospects.
It has set up a specialist team to handle the portfolio and decide whether or not it should cut its losses should a particular investment lose 30 percent or CNY10 million (USD1.5 million) in value, the firm said. The Shanghai Composite Index, which tracks all companies trading on the city's bourse, has lost almost 25 percent in value so far this year.
Another firm keen to improve its bottom line through securities investments is Shangfeng Cement. The Gansu-based firm plans to double its investment limit to CNY400 million (USD60 million), which can be used for newly-issued stock, share buybacks, bonds, futures, private equity funds and other stock market investments.
Editor: James Boynton