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Criteria set for overseas firms to trade on Shanghai board
By Lydia Chen |
April 22, 2011, Friday
|
Online Edition
Online Edition
CHINA'S top securities regulator may allow 10 overseas-listed companies to be the first group to sell shares on Shanghai Stock Exchange's international board when it opens later this year, media reports said.
The 10 firms, including foreign companies, will trade their stocks on the new board in a trial program after two years of preparation, the 21st Century Business Herald reported today.
All the candidates are required to have at least a market capitalization of 30 billion yuan (US$4.6 billion) and a combined three-year net income over 3 billion yuan. Net profit in the previous year should exceed 1 billion yuan, according to the disclosed plan of the China Securities Regulatory Commission.
Their initial share prices on the international board will be based on market consultation while their prices in overseas markets will be a reference, the plan said.
The amount of shares to be traded on the board should be no less than 5 percent of the company's tradable shares.
Funds raised from the board can be used by the company in China or abroad, it added.
Red-chips firms -- Chinese companies listed in overseas markets -- are likely to outnumber their foreign counterparts in the first batch.
Currently, more than 80 Chinese firms have been listed in the Hong Kong stock market, including industry leaders such as China Mobile and CNOOC Ltd.
Fu Chengyu, chairman of the state-owned CNOOC, said last month that his company was seeking to sell shares on the foreign board if it could win approval from the regulator.
Foreign firms are not left out in the cold. HSBC, Standard Chartered, Bank of East Asia, P&G, Unilever and Royal Dutch Shell all have expressed their interest in listing on the new board.
Shanghai plans to build itself into an international financial center by 2020 and introduced stock-index futures last year.
The 10 firms, including foreign companies, will trade their stocks on the new board in a trial program after two years of preparation, the 21st Century Business Herald reported today.
All the candidates are required to have at least a market capitalization of 30 billion yuan (US$4.6 billion) and a combined three-year net income over 3 billion yuan. Net profit in the previous year should exceed 1 billion yuan, according to the disclosed plan of the China Securities Regulatory Commission.
Their initial share prices on the international board will be based on market consultation while their prices in overseas markets will be a reference, the plan said.
The amount of shares to be traded on the board should be no less than 5 percent of the company's tradable shares.
Funds raised from the board can be used by the company in China or abroad, it added.
Red-chips firms -- Chinese companies listed in overseas markets -- are likely to outnumber their foreign counterparts in the first batch.
Currently, more than 80 Chinese firms have been listed in the Hong Kong stock market, including industry leaders such as China Mobile and CNOOC Ltd.
Fu Chengyu, chairman of the state-owned CNOOC, said last month that his company was seeking to sell shares on the foreign board if it could win approval from the regulator.
Foreign firms are not left out in the cold. HSBC, Standard Chartered, Bank of East Asia, P&G, Unilever and Royal Dutch Shell all have expressed their interest in listing on the new board.
Shanghai plans to build itself into an international financial center by 2020 and introduced stock-index futures last year.
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