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BEIJING RECONSIDERS FOREIGN LISTINGS By Jamil Anderlini in Beijing , Tom Mitchell in Hong Kong 2009-08-06
The Chinese government is moving closer to allowing foreign companies to sell shares in mainland China for the first time as part of a strategy approved this year to try to develop Shanghai into an international financial centre.
Plans to allow foreign listings have been proposed repeatedly in the past decade but have all been cancelled over fears that a flood of new shares would depress prices, or because of concerns that opening up the market would attract unwanted scrutiny of the government's tight control over the listing process.
However, moves by China's top leaders to develop Shanghai, the country's commercial capital, into an international centre have provided impetus for a long-standing plan to allow foreign companies to list on mainland bourses.
HSBC, which has flagged its ambition to list in China, is picking advisers for a listing in its original home market of Shanghai.
“We will definitely want to do it,” Stephen Green, HSBC chairman, said at the bank's first-half results conference in Hong Kong this week. “That is the strategic statement that we'd like to make – that China is our natural home.”
As well as allowing large blue-chip foreign companies such as HSBC to list in China, Beijing is also reconsidering a long-delayed plan to allow so-called “red chip” Chinese companies listed abroad to return to their home market.
“Red chips” are mostly large state-owned Chinese companies, such as China Mobile and China National Offshore Oil Corporation, that have incorporated abroad and sold shares in the Hong Kong stock market.
Rules that would allow these companies to sell shares to mainland Chinese investors, who are in effect barred from buying equities outside the country, have been under consideration for at least four years.
While HSBC and other foreign companies with a large presence in China would welcome the opportunity to raise renminbi in the booming mainland stock markets, a timetable for when the government will allow it to happen has still not been set, according to people familiar with the situation.
Added to that, Chinese regulators are notoriously fickle and cautious when it comes to rolling out new policy initiatives. |
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