CHINA is to abolish short-lists of candidates for overseas stock exchange listing because of an increasing number of applicants, according to NASDAQ's Asia Pacific business development director Patrick Sutch. Mr Sutch said he was told of the change by China Securities Regulatory Commission officials during a visit to Beijing last week. He said the commission would allow individual applications by companies wanting overseas listings. 'It means we have to widen our net [of publicising NASDAQ],' he said. 'We can't just hold talks with the regulator only.' Mr Sutch said at least two Chinese companies would list on the NASDAQ system by the end of the year. The number of overseas listing candidates is strictly controlled by the Chinese Government. The commission has so far assigned three batches of companies (38 in all) for direct listing on foreign exchanges. Mr Sutch said the abolition of the short list indicated a shift in policy that previously favoured large state-owned enterprises. Companies with healthy profit and loss accounts would now have the chance to go abroad, he said. He believed the state changed the policy because it was facing increasing pressure from Chinese companies to raise funds overseas. The first batch of H-share candidates earmarked for a Hong Kong listing was announced in October 1992. The second batch of 22 companies was made public early last year, including five slated for listing in the United States. Although the commission has not officially announced the short list of a third batch, seven companies had been chosen last year for overseas listing. There was pressure from B-share companies to seek secondary listing overseas because of low liquidity in the Shanghai and Shenzhen stock markets. B shares on those exchanges are those that can be bought by foreign investors. About four B-share companies in Shenzhen are expected to list on the Singapore exchange after the secondary listing of China Merchants Shekou Port there. Mr Sutch said NASDAQ would actively seek B-share companies. Some H-share companies have secondary listings in the US through the issue of American depositary receipts and some B-share companies are planning to issue them in the US.
