Banks and electricity firms are widely tipped as frontrunners for a trial preferred share scheme, the Shanghai Securities News reported Monday. According to a report from the China Financial Futures Exchange, the test scheme could benefit the financial sector and industries involved in mergers and acquisitions. The preferred shares will be considered as bank tier-one capital, helping lenders lower their core capital requirements. Preferred share schemes could also help power companies lower their borrowing costs, which would otherwise be high because their average debt ratios are usually around 70 to 80 percent, the report said.
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