International stock board put on back burner again

The mainland's securities regulator scotched the rumours of the imminent launch of a much-awaited international board that would allow foreign companies to list yuan-denominated A shares.

The China Securities Regulatory Commission (CSRC) yesterday said it had no timetable for the creation of the board. Sources said the statement, though unchanged from the previous ones, indicated the regulator had put on ice the plan to set up the international board.

'CSRC chairman Guo Shuqing has been openly reluctant about creating the board in the near future,' said one source close to the CSRC. 'It'll be a long time before the regulator studies the proposal again.'

The Shanghai Composite Index posted its biggest decline in more than six months on Monday, dropping 2.73 per cent, as skittish investors rushed to cash out after eight ministry-level authorities, including the nation's top planning agency, said in a joint statement that Beijing would continue to encourage foreign companies to raise funds on China's stock market.

The statement was widely interpreted as just another example of lip service by the government as the CSRC, the agency responsible for the international board, was not among the bodies endorsing it.

Beijing announced in 2009 that it would establish an international board on the Shanghai Stock Exchange, allowing foreign corporate giants such as HSBC Holdings to list A shares. But worries of a market downturn prevented the CSRC from giving the board the go-ahead.