Stocks News
- SOEs warned against stock investment
Date: 3-Aug-2007 Sources: (Shenzhen Daily)
THE government has issued a fresh warning to State-owned enterprises (SOEs) not to use bank loans for illicit investment in shares and property.
Firms that are caught ignoring the order will be named and shamed, while the executives responsible will be punished, the State-owned Assets Supervision and Administration Commission (SASAC) said in a statement Thursday.
Banking regulators have repeatedly instructed lenders to scrutinize the use of the loans they make and punished eight banks in June for lending money that was eventually invested in shares and real estate.
Investment gains are pumping up profits at many companies, which have joined retail investors in piling into the rallying stock market.
The Shanghai Composite Index has risen 60.7 percent since the start of the year.
SASAC also told State firms to provide timely reports of their overseas investments and capital spending in non-core businesses.
While most State-owned enterprises were abiding by government rules and effectively avoiding investment risks, some were still investing blindly, SASAC said.
State firms earned 753.5 billion yuan (US$99.7 billion) in after-tax profits in the first six months, up 31.5 percent from a year earlier.
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