China Halts Red-Chips' A-Share Plans
Beijing has called for a halt to red-chip companies, or China-backed firms incorporated and listed in Hong Kong, listing their shares in Shanghai amid a weak mainland stock market, a Hong Kong newspaper reported on Monday.
The South China Morning Post quoted sources familiar with the the plans as saying it was unlikely that any red chips, including China Mobile, CNOOC, Lenovo or China Netcom, would be allowed to list A shares on the Shanghai Stock Exchange this year.
"The repatriation (of the red chips) is being held up because the State Council has intervened to call a halt to the plan," the newspaper quoted a Shanghai exchange official as saying. "The central government is now reassessing the matter and it will take some time before the plans go ahead."
China had initially planned to approve the first red-chip listing in Shanghai in June, but the plans would now be delayed until sentiment for A shares recovered, the newspaper said.
It did not give any financial details.
The Shanghai Composite Index has fallen more than 33 percent so far this year, while Hong Kong's benchmark Hang Seng Index has dropped 11 percent this year.