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​DR-issuers list to be unveiled soon for new stock-connect scheme

2018-12-17 19:43  Cfbond

By Yin Lei

A shortlist of companies to offer their depositary receipts (DRs) under the Shanghai-London Stock Connect program may be released by the end of this month, with trading expected to start in January 2019, said a report of Economic Information Daily on Monday.

Several Chinese securities brokerages said that multiple technical testing had been completed in the lead-up to the launch of this program, which would allow companies listed at China’s Shanghai Stock Exchange (SSE) and the UK’s London Stock Exchange (LSE) to issue DRs at each other’s stock market.

These securities companies have already filed applications to the SSE for the authorization to trade the receipts and are gearing up for the kick-off of this program by enhancing investor education and market research activities.

British companies allowed to issue their Chinese depositary receipts (CDRs) as certificates of their shares at the SSE may mostly be constitutes of the FTSE 100 Index, according to a prediction of China Securities Co., Ltd.

In November, China’s Huatai Securities Co., Ltd. obtained approvals from the securities regulators in both China and the UK to offer no more than 82.515 million global depositary receipts (GDRs) at the LSE, which will be backed by 825.15 million new shares to be issued in advance at home.

The launch of the Shanghai-London Stock Connect program may not have much short-term impact on the A-share market but can help channel more inbound investments to it in the long term, according to an analysis of Golden Sun Securities Co., Ltd. based in central China.

This scheme doesn’t involve additional cash flows across the border as it only increases the number and varieties of investment targets at the two exchanges. In the mid and long-term, it will help China’s public companies go abroad and increase the depth of China’s stock market to enhance its attractiveness to foreign investors.

责任编辑:Dai Qi
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