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SSE chief defends international board against rising doubts
By Lydia Chen |
November 24, 2011, Thursday
|
Online Edition
Online Edition
THE launch of the much-anticipated international board in Shanghai will be constructive to the country and local economies, Zhang Yujun, president of Shanghai Stock Exchange said today.
The comments, which have repeatedly been made in public by Zhang and other senior municipal government officials, came in the face of increasing fears that the possible rollout of the foreign board may cause a collapse of the country's A-share market that has already slumped more than 15 percent so far this year.
A launch date for the international board was previously set for sometime before year-end.
Zhang said the idea of having the international board, where foreign firms could sell yuan-denominated bonds in the financial hub of Shanghai, was based on the precondition that it would aid the world's second largest economy in building its financial industry.
"We've given careful and serious thought to all kinds of concerns when we tried to set up the system for the board," Zhang said at a forum this morning.
The international board was a must-have on Shanghai's road to building itself into a world financial center by 2020, said Tu Guangshao, vice city mayor, also said at the forum.
Fang Xinghai, head of Shanghai's financial services office, said in September that the new board would be a good financing platform for foreign firms now struggling amid global financial turmoil, especially in eurozone countries.
Despite all the endorsements from local officials, critics are also rife in the markets, which described the launch of the new board "a total disaster" for the stock markets.
"China's yuan is still not convertible in the world markets," said Xie Baisan, director of Research Center for financial and capital markets of Fudan University. "The launch of the board will affect the yuan, which will then have impacts on the country's overall economy."
Liu Jipeng, director of Capital Research Center at China University of Political Science, agreed and said investor confidence would be drained if the international board was launched, since foreign firms would raise hundreds of billions of money in their initial public offerings, a mission that would be too much for China's stock markets that have already faltered under the weight of numerous new listings.
The comments, which have repeatedly been made in public by Zhang and other senior municipal government officials, came in the face of increasing fears that the possible rollout of the foreign board may cause a collapse of the country's A-share market that has already slumped more than 15 percent so far this year.
A launch date for the international board was previously set for sometime before year-end.
Zhang said the idea of having the international board, where foreign firms could sell yuan-denominated bonds in the financial hub of Shanghai, was based on the precondition that it would aid the world's second largest economy in building its financial industry.
"We've given careful and serious thought to all kinds of concerns when we tried to set up the system for the board," Zhang said at a forum this morning.
The international board was a must-have on Shanghai's road to building itself into a world financial center by 2020, said Tu Guangshao, vice city mayor, also said at the forum.
Fang Xinghai, head of Shanghai's financial services office, said in September that the new board would be a good financing platform for foreign firms now struggling amid global financial turmoil, especially in eurozone countries.
Despite all the endorsements from local officials, critics are also rife in the markets, which described the launch of the new board "a total disaster" for the stock markets.
"China's yuan is still not convertible in the world markets," said Xie Baisan, director of Research Center for financial and capital markets of Fudan University. "The launch of the board will affect the yuan, which will then have impacts on the country's overall economy."
Liu Jipeng, director of Capital Research Center at China University of Political Science, agreed and said investor confidence would be drained if the international board was launched, since foreign firms would raise hundreds of billions of money in their initial public offerings, a mission that would be too much for China's stock markets that have already faltered under the weight of numerous new listings.
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