Bocom shares surge after state council approves reform plan

Bank of Communications Co., China’s fifth-largest lender, said the State Council approved a sweeping reform plan that includes potential changes in its ownership. Its shares rallied.
While the government will remain the controlling shareholder in Bocom – which is part-owned by HSBC Holdings Plc – the bank will explore adding private capital and giving strategic investors a more effective role, it said in a stock exchange statement on Tuesday. The lender also plans stock incentives for employees and management, the statement showed.
Shares of Bocom rose 2.1 percent in Hong Kong as of 10:01 a.m. yesterday and rallied as much as 7.4 percent in Shanghai.
China’s government aims for a more market-driven financial industry to aid economic growth. Lenders such as Bank of China Ltd. and China Construction Bank Corp. will echo Bocom’s plan, leading to long-term gains in share prices, Ma Kunpeng, an analyst with Sinolink Securities Co., said in a note on Tuesday.
Shanghai-based Bocom said in July that it was studying plans to “deepen” mixed ownership and improve corporate governance. In August, then Vice President Qian Wenhui said that reforms will cover ownership structure, management and human resources.
As of March, the finance ministry owned 26.5 percent of Bocom and HSBC held 18.7 percent. Bloomberg