The New York Stock Exchange is working with China to launch the country's international board, which will allow foreign companies to list in the Chinese mainland.
The New York Stock Exchange is working with China to launch the country's international board, which will allow foreign companies to list in the Chinese mainland.
NYSE Euronext Chairman Jan-Michiel Hessels said his exchange was working with Chinese authorities on the board and his company would be "strongly interested" in listing on it, Reuters reported Saturday.
"As a leading stock exchange we feel we should be listed on the international board," he told Reuters on the sidelines of the 2011 Lujiazui Forum in Shanghai Saturday.
"The international board is getting closer," Shang Fulin, chairman of the China Securities Regulatory Commission, declared at the forum Saturday.
The government is preparing for the launch of the board and is working on regulations, according to Shang, but no specific schedule has been disclosed.
China's plan to launch an international board on the Shanghai Stock Exchange, which was seen as a necessary step in developing the country's capital markets, was initiated in 2009. The new board will allow foreign companies to issue yuan-denominated stocks on the Chinese mainland, as part of a long-term strategy to make Shanghai an international financial center by 2020.
Geng Liang, chairman of the Shanghai Stock Exchange, said in March that the board's draft regulations had been decided, including terms for the process of initial public offerings, trading and clearing.
Industry watchers said the regulations for the board are almost complete, but that it will take time for market participants, including companies and investors, to make full preparations.
"Both the investors and the large companies including NYSE should have realistic expectations about stock valuations, especially the P/E ratios (price-to-earnings ratios), which are quite different currently between China and other outbound markets," Li Daxiao, research director of Yingda Securities, told the Global Times Sunday.
HSBC, Unilever and Standard Chartered Plc have said they want to list on the international board.
Xiang Songzuo, deputy director of the International Monetary Institute with Renmin University of China, said domestic underwriters who are not familiar with foreign companies' management structures might also face competition from foreign underwriters.
"The most urgent issue that would hold up the launching of the international board is the restricted exchange and lack of internationalization of the yuan," Xiang said.
"Investors, especially foreign participants, must have an independent capital account that can only be applied on the international board, so as to avoid foreign capital randomly entering into other areas of the economy," Xiang added.
