Stocks News
- Regulators may curb red-chip offerings
Date: 18-May-2007 Sources: (Shenzhen Daily)
REGULATORS may set restrictions on domestic stock offerings by firms incorporated abroad - so-called 'red chips?- including a requirement of at least 1 billion yuan (US$130 million) in annual net profit, the Securities Times said Thursday.
Red-chip firms, incorporated and listed in Hong Kong but controlled by mainland shareholders, will be encouraged to issue yuan-denominated A shares instead of using other forms of offers, such as China Depository Receipts, the newspaper said.
The Shanghai Securities News on Thursday quoted China Mobile Ltd. chief executive officer Wang Jianzhou as saying the red-chip firm, the world's largest wireless carrier, was preparing to launch an A-share offer, although it did not have a timetable because the government had yet to work out related policies.
Previous media reports have said that other large-cap red-chip shares such as Lenovo Group and oil company CNOOC were considering similar moves.
'The return of red chips to the mainland market will mainly be open to major corporations and will initially not be open small companies,'the Securities Times said, citing unnamed stock regulators.
Red-chip companies whose parent firms or units have already been listed on the Shanghai or Shenzhen stock exchanges would also be excluded for the time being, the Securities Times said.
Domestic media have reported that securities regulators are drafting rules to let red chips float shares domestically as early as the second half of this year.
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