Hong Kong, London
HSBC Holdings Plc is examining plans for the upcoming Shanghai-London trading link, a move that could see Europe’s largest bank list shares in China.
HSBC is the first UK company to publicly state an interest in taking part in the programme, which will allow firms listed on exchanges in either of the two cities to issue depositary receipts on the other’s venue. “We are studying the proposed framework for the listing of Chinese depositary receipts under the Shanghai-London Stock Connect but cannot comment further at this time,” HSBC’s Hong Kong-based spokeswoman Vinh Tran said.
An HSBC listing using the connection would be a boost for Chinese authorities, who have watched their benchmark index fall more than 20 per cent this year amid a worsening economy and an escalating trade war with the US. The link is part of a broader effort to globally integrate China’s financial markets and internationalise its currency while maintaining some of the world’s strictest capital controls.
The plan to issue London Stock Exchange-listed HSBC shares in Shanghai is viewed as a symbolic step after years of planning. “There’s strong demand for foreign stocks among mainland investors in China,” said Stanislas Beneteau, UK head of financial intermediaries and corporates at BNP Paribas. “We are seeing interest from clients.”
The programme could see 50 companies on the Shanghai and London sides list on each others’ markets within a few years, he said. Expanding HSBC in key Asian markets including China is a core part of its strategy under John Flint, who became CEO in February. Asia contributed 77 per cent to HSBC’s adjusted pre-tax profit in the first-half.