Foreign companies may sell shares in free trade zone- report
Citing unnamed sources, the Wall Street Journal reported that China may allow foreign firms operating in the Shanghai free trade zone to sell shares. A designated trading platform would be established to allow companies to raise capital through a share sale, according to the sources.
One of the people with knowledge of the matter also said that the Shanghai Equity Exchange was already thinking of forming the said platform. The Shanghai Stock Exchange has a 29% stake in the Equity Exchange.
According to Bloomberg, foreign equities trading would fuel Shanghai's goals of becoming a worldwide financial center in seven years. It would also widen the options for individual investors in China who could not purchase shares in foreign firms because of the country's strict capital controls.
One of the companies that have expressed interest in selling stock in Shanghai is HSBC Holdings Plc, Bloomberg reported. The Shanghai free-trade zone authorities approved the application of HSBC Holdings and Bank of East Asia to build a sub-branch in the zone.