HSBC Gears Up for China Listing Through Shanghai-London Link

Oct 18 2018, 7:51 AMOct 18 2018, 9:02 AMOctober 18 2018, 7:51 AMOctober 18 2018, 9:02 AM

(Bloomberg) -- 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.

London-based HSBC is the first U.K. company to publicly state an interest in taking part in the program, which will allow firms listed on exchanges in 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 in an email.

An HSBC listing using the connect would be a boost for Chinese authorities, who have watched their benchmark index fall more than 20 percent this year amid a worsening economy and an escalating trade war with the U.S. The link is part of a broader effort to globally integrate China’s financial markets and internationalize 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, the Financial Times reported earlier, citing two unnamed people with knowledge of the matter.

Expanding the bank in key markets in Asia, including China, is a core part of its strategy under John Flint, who became CEO in February -- a push that includes spending billions of dollars in the region. Asia contributed 77 percent to HSBC’s adjusted pretax profit in the first half.