Good news for foreign issuers looking to access China’s capital markets. The Shanghai Stock Exchange “is basically ready” to allow overseas companies to sell stock directly in mainland China, with the work on the technology and regulatory requirements now completed, according to Xu Ming, the executive responsible for the exchange’s international board.
Speaking in an interview with Bloomberg, Xu said that trading should start “as soon as possible and when the time is ripe”.
Despite the tantalising talk, there is no specific timetable for launch.
But when it does happen, it will be a significant day for China’s stock markets. “The internationalisation of the securities market will benefit the whole nation and overseas companies are highly motivated,” Xu noted.
Senior executives at well-known corporates such as Coca Cola, NYSE Euronext and HSBC have all expressed an interest in selling shares in Shanghai.
Xu also dismissed reports claiming that Chinese companies already listed in Hong Kong – the so-called ‘red chips’ – would be the first to get the green light for a new Shanghai presence (there has been speculation that some CFOs at Chinese companies listed on foreign bourses might choose to delist and return to Shanghai, where capital might be raised on easier terms). “We don’t give priority to whether foreign companies or red-chip companies should be listed first,” Xu confirmed. “Whoever is ripe will get listed first.”
The appointment of pro-reform Guo Shuqing as head of the CSRC, the stock market regulator, is also thought to bode well for the new board’s launch. But Economic Information Daily also carried Xu’s warning that the timing of the launch was the prerogative of the NDRC, the economic planning agency, as well as the State Council.
He added that the depressed state of China’s A-share market was the chief reason the board had been delayed so far.
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