China may allow foreign share sales in new trade zone
CHINA may allow foreign companies registered in the Shanghai free-trade zone to raise capital by selling shares on a designated trading platform, the Wall Street Journal reported, citing two unidentified people with direct knowledge of the matter.
The Shanghai equity exchange, which is 29 per cent owned by Shanghai Stock Exchange, is considering developing such a platform, the report said, citing one of the people.
The trading of foreign equities would add impetus to Shanghai's drive to become a global financial centre by 2020 and broaden options for the nation's individual investors, who are restricted from buying shares abroad by China's capital controls.
HSBC Holdings Plc is among companies expressing interest in selling stock in Shanghai.
HSBC Holdings and Bank of East Asia Ltd have won approval to set up a sub-branch in Shanghai's free-trade zone as China seeks to create a more efficient and open economic system. HSBC's outlet in the zone will start operations by early next year, Europe's largest lender said last Saturday.
Shanghai last month inaugurated the 11 sq mile zone as a testing ground for free-market policies that Premier Li Keqiang has signalled may later be implemented more broadly in the world's second-largest economy. The State Council on September 27 announced plans to allow trials of yuan convertibility in capital flows and permit foreign companies to invest in more of the nation's service industries in the zone.
A person at the general line of the Shanghai equity exchange said she wasn't aware of the Wall Street Journal report and declined to identify herself.
The Shanghai exchange denied market rumours that an international board will start in the city's free-trade zone, the Shanghai Securities News reported on October 10, citing an unidentified person from the exchange.
A spokesman wouldn't comment on the report when contacted by Bloomberg. Bloomberg