Date
23 July 2017
Depository receipts of foreign companies may soon be traded on the Shanghai Stock Exchange. Photo: 123rf.com/Deng Songquan
Depository receipts of foreign companies may soon be traded on the Shanghai Stock Exchange. Photo: 123rf.com/Deng Songquan

PBoC: China will allow foreign firms to issue shares in mainland

China will continue to push forward with the opening up of its capital markets, the central bank said in its annual report for 2015.

Beijing will allow qualified foreign firms to issue stocks in the mainland, the People’s Bank of China said.

It said it will consider allowing foreign firms to issue Chinese depository receipts, Reuters reported.

Depository receipts are a mechanism for foreign firms to issue shares on a local stock exchange.

Chinese firms have long made use of American depository receipts (ADRs) to issue shares on US exchanges.

Previous efforts to allow foreign firms to issue shares in mainland stock markets have failed, though progress has been made in opening the bond markets to foreign investors.

A PBoC researcher said Friday that foreign firms will be encouraged to issue and trade renminbi bonds and sell shares in mainland markets and that a stock connection between Shenzhen and Hong Kong will come “at an appropriate time”.

The central bank’s annual report, released Tuesday, gives a summary of China’s financial and monetary conditions and also provides an outlook for the economy.

The PBoC said it will keep monetary policy prudent, pledged strict control of additional industrial capacity and said it expects a mild acceleration of inflation.

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RC/FL

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