Shanghai Exchange Is Courting HSBC to Boost Its Profile: FT

The Shanghai stock exchange is in talks with HSBC and other high-profile foreign firms to list their shares in mainland China, as part of its strategy to revive the recently moribund bourse, the Financial Times reported on Tuesday.

The exchange has held positive discussions with several companies, including HSBC, the newspaper quoted James Liu, a senior bourse official, as saying.

A mainland China listing for global lender HSBC would underline the dramatic re-emergence of Shanghai as an attractive capital market following a four-year slump, the newspaper said. The flagship Shanghai index has trebled over the past 18 months.

Listings for foreign firms would also boost their profile in China as they look to expand in the massive, fast growing market.

But no such foreign listings are expected in the short-term and several technical issues still need to be resolved, the newspaper said.

"We have had discussions with HSBC (about a listing) but what happens is up to them," Liu, the exchange's executive vice-president, was quoted as saying. "I don't know if we will see it this year or next year. In the long run, yes, no question it will happen. We want overseas groups to list here."

Lawyers familiar with the situation said the China Securities Regulatory Commission was debating whether to allow non mainland-based firms to list on the mainland, the newspaper said.

HSBC declined to comment on the issue, but said last year that it and its Hong Kong-based subsidiary, Hang Seng Bank, were interested in a mainland China listing.

HSBC, listed in London and Hong Kong, wants to nearly double the number of outlets in China to about 65 by the end of 2007.