Reuters
China formalized a plan for its technology giants to trade on the nation’s stock market, opening its doors for the imminent listing of smartphone maker Xiaomi Corp. and the homecoming of Alibaba Group Holding Ltd.
The country’s securities regulator published guidelines late Wednesday for a new class of yuan-denominated securities called depositary receipts. Companies can now apply to list in China under the program, which analysts say offers a fast-track to local stock exchanges—at least initially. It also provides a mechanism for overseas-listed Chinese companies such as Alibaba, Tencent Holdings Ltd. and JD.com Inc. to trade on the mainland.
Xiaomi—which is planning a $10 billion initial public offering according to people familiar with the matter, in July on Hong Kong’s stock exchange—will likely be the first company to list in mainland China using this mechanism, according to market participants. The Beijing-based smartphone maker is expected to file its application soon with mainland authorities.
The securities regulator also approved six mutual funds to invest in the depositary receipts. That suggests initial sales of the instruments might be limited to sophisticated investors, thereby limiting potential mishaps and losses for individual investors, say analysts.
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