BIZCHINA / News
Shanghai exchange prepares to welcome red-chip trading
(Shanghai Daily)
Updated: 2007-02-28 16:20
The Shanghai Stock Exchange plans to allow Hong Kong-incorporated
mainland firms to sell shares on the local bourse "soon" as it attempts
to boost the market's size and quality, its chairman said yesterday.
"We will further attract large enterprises to sell shares in Shanghai,
with an aim to get Hong Kong red chips to list here soon," said Chairman
Geng Liang.
Geng's comments came yesterday during Shanghai's annual financial work
meeting, which brings together government leaders, regulators and
business people to discuss the city's economic blueprint for the coming
year.
Geng didn't specify how Chinese mainland firms incorporated in Hong Kong,
or red chips, will accomplish a listing in Shanghai.
Hong Kong-traded red chips can't be purchased directly by mainland
citizens since the companies are regarded as foreign firms.
Stock regulators have indicated that red-chip companies may be allowed to
issue Chinese depositary receipts, or CDRs, to tap the growing pool of
mainland investors.
CDRs are similar to American depositary receipts, which are certificates
issued by a US bank representing a number of foreign stocks held and
traded in the United States as domestic shares.
Large-cap red chips such as China Mobile Ltd and PetroChina Co are
reportedly among the first companies likely to sell CDRs. China Mobile
said last year it was awaiting approval on an application submitted about
five years ago for a CDR issue.
(For more biz stories, please visit Industry Updates)
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