Shanghai may sell multinational shares

The Shanghai Stock Exchange may allow big multinational companies to sell shares in China to expand the nation's capital markets, Xinhua news agency said, citing Que Bo (闕波), assistant general manager of the bourse.

China's largest stock exchange may permit companies such as HSBC Holdings Plc, Coca-Cola Co and Siemens AG to trade, and is conducting market research for the plan, the agency said.

Allowing overseas companies to sell shares in China may help accelerate government efforts to fully open the country's capital account, easing restrictions on inflows and outflows of yuan for investment purposes, said Liang Futao (梁福濤), an analyst at Shenyin Wanguo Research and Consulting Co (申銀萬國證券) in Shanghai.

"This may suggest foreign companies can raise money in China and use the funds outside the country," Liang said yesterday in a telephone interview.

China allowed the yuan to be freely convertible under the current account in December 1996, removing limits on the use of foreign exchange for trade in goods and services.

"The yuan will eventually become a freely convertible currency and China will open its capital account, even if we haven't set a clear timetable," Zhou Xiaochuan (周小川), governor of the People's Bank of China, said during an interview with reporters in Beijing on Oct. 18.

"China had agreed in principle to make the yuan convertible in the 1990s, but we halted the plan during the 1997 Asian Financial Crisis," he said.