Citic Pacific is the latest Hong Kong-listed mainland company pondering a Shanghai listing. 'We are interested in obtaining a listing in Shanghai, if regulations permit,' a spokesman for the red chip said. However, she declined to comment when asked whether Citic Pacific had hired Citic Securities to underwrite an offering. Citic Securities also declined to comment on whether it was advising Citic Pacific on any offering. Even though mainland listings involve higher approval costs and more red tape, Sean Darby, an Asia strategist at Nomura International, said firms with a significant presence in China would probably obtain listings in Shanghai. The drive to allow Hong Kong-traded firms to list in Shanghai would benefit both foreign firms and mainland investors in the long term, he said. Mainland investors are not allowed to buy foreign equities except through approved qualified domestic institutional investor funds. However, Darby said the mainland might be cautious about opening up the market. This was because inviting overseas companies to list might affect its management of foreign exchange capital conversion by overseas enterprises. He said their use of yuan-denominated funds would also be a concern for regulators. Beijing said earlier this year that it would permit foreign firms to list in Shanghai and use yuan for trade settlement on a trial basis. HSBC China chief executive Richard Yorke said last month that the bank was looking forward to listing on the Shanghai Stock Exchange. The China Banking Regulatory Commission has yet to come up with solid changes to its regime governing foreign enterprises. Companies with 25 per cent or more foreign ownership are not permitted to list on the mainland. But a proposed change in regulations could also see the return of Hong Kong-traded mainland companies such as China Mobile, CNOOC and Lenovo Group to raise funds in their domestic market.
