Shanghai’s stock exchange will offer 24-hour trading, negating the time difference with New York. Picture by AFP
Source: The Australian
HSBC and Standard Chartered are leading a pack of bankers raring to go as non-Chinese companies eye the prize of an IPO in Shanghai.
More than one dozen global corporate titans are ready for the dash to become the first non-Chinese company to list on the Shanghai Stock Exchange – a much-delayed race that is expected to start this spring.
Passions will run particularly high in the duel between HSBC and Standard Chartered as the two Hong Kong-listed financial groups fight to secure bragging rights, investment bankers predict.
The group of hopefuls, described by one observer as a “paddock of household names”, believes that the Chinese authorities are preparing to publish listing guidelines in late March for the Shanghai exchange’s still non-existent international board.
The names eagerly awaiting publication of the rulebook are understood to include American groups such as Wal-Mart, Coca-Cola, Citigroup and NYSE Euronext. In Europe, Siemens and at least two carmakers are understood to be talking with advisers over a possible listing. The list could also feature some ‘red chips’: companies that are usually registered and listed in Hong Kong but whose business is primarily in mainland China.
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One company hoping to be among the first wave said that the attraction was as much about local brand-building in China as latching on to a source of yuan-denominated funding. “More so than a Hong Kong listing, a Shanghai initial public offering would be about demonstrating to Chinese consumers and the authorities that you are serious about China,” a company official said.
Shanghai is impatient to fire the starting gun. The inability of foreign companies to list is blocking the city’s hope of becoming an international finance hub and the natural home of a more internationalised Chinese currency.
Despite the feverish growth of China, Shanghai remains outside the world’s top five exchanges by market capitalisation and has fewer than half the number of companies that are listed in New York.
Shanghai’s ambitions include becoming the first exchange to offer 24-hour trading. The promise of that facility, negating the time difference between Shanghai and New York, is designed unambiguously to attract foreign listings and highlight the relative weakness of Tokyo.
The listing rules are expected to be published in March despite an assertion last month by the China Securities Regulatory Commission that Beijing had not set a timetable. However, legal sources in Beijing told The Times that there had been an acceleration of activity in recent weeks. Officials had indicated a strong likelihood that the rules would become available by the end of the first quarter.
The first wave of listings would probably be under way by mid-year.
The increased urgency is understood to be linked to a series of developments that have brought the renminbi – the Chinese currency commonly called the yuan – a few steps closer to internationalisation. Companies such as McDonald’s and organisations including the World Bank have been early exploiters of rules that allow foreign companies to issue yuan-denominated bonds in Hong Kong.