Hong Kong-listed H-share firms and other overseas-listed mainland companies will have wider access to the domestic A-share market, Zhou Xiaochuan, chairman of the China Securities Regulatory Commission (CSRC), said Thursday.
The authorities will come up with more substantial regulations to boost such multi-place listing in order for domestic companies to feed their demand for funds.
H shares are issued by mainland companies in Hong Kong, while A and B shares are issued by mainland firms to domestic and foreign investors.
Listing in both overseas and domestic stock markets will help domestic firms get cash from a wider range of investors, said Zhou while attending a seminar on Hong Kong-listed Chinese companies Thursday in Beijing.
It will also put the companies under wider public supervision and urge them to improve their management structures, making them more attractive to overseas investors.
China has recently relaxed the two-year-ban that banned H-share and B-share companies from issuing A shares.
Guangzhou Pharmaceutical Co was the first company with only H shares to issue A shares in Shanghai in January. A number of H-share companies have also filed similar applications to issue A shares this year, according to K. C. Kwong, chief executive of the Hong Kong Exchange and Clearing Limited.
Kwong said the Hong Kong exchange will strengthen co-operation with the mainland exchanges in Shanghai and Shenzhen.
Regulators from both sides will also consolidate communication and adjust rules regarding regulation of H-share firms.
China's State-owned enterprises raised US$20 billion worth of funds through overseas capital market last year, a large proportion of which was acquired through the stock market in Hong Kong.
A number of large State firms have announced plans to start IPOs (initial public offerings) in Hong Kong this year, including CNOOC, China Telecommunications (Group) Ltd and the Bank of China's Hong Kong and Macao operations.
The government has expressed its support for letting more State firms seek overseas listing to acquire foreign funds, but has asked them to first strengthen their management structure and restructure.
Listing more large-size mainland State firms will further consolidate Hong Kong's role as an international financial centre, according to Andrew L. T. Sheng, chairman of the Hong Kong Securities and Futures Commission.
(China Daily 02/16/2001)
