PAVING the way for dual listing in Hong Kong by China's state-owned enterprises, the stock exchange is studying the regulations governing protection of investors' interests, according to head of listing Herbert Hui. But, he stressed the exchange would not loosely approve the dual listings by the five enterprises which were allowed primary listing in the United States. ''We will not only pay attention to trading arrangements, but also take interest in investors' protection,'' said Mr Hui yesterday. The rout of Shandong Huaneng Power Development Co, the first US primary listing by a mainland state-owned enterprise (N share) , prompted suggestions that a dual listing in Hong Kong would secure better investor interest. ''Every good Chinese company will get shares actively traded in Hong Kong,'' said Mr Hui, pointing to the close geographical and cultural links between the territory and the mainland. He said the exchange had discussed technical issues concerning dual listing with industry participants, but had yet to approach the five Chinese enterprises. He said that the exchange would apply the same regulatory standard to the dual listing candidates under the listing rules of Chapter 19A, which govern H share listing in Hong Kong. Shandong Huaneng fell victim to US investors' apathy to Chinese offerings, with a pricing of 12.3 times 1995 earnings - a pricing considerably higher than the domestic utility issues in the US. The stock had been drifting below the issue price since the listing on the New York Stock Exchange on August 4. Its American Depositary Receipts finished on Tuesday at US$14.125, still 12.5 cents short of the issue price. Shandong Huaneng chairman Xu Fangjie said the company would first handle the outstanding issues after the US flotation before deciding on a dual listing. Southern Airlines, which is among the five designated for US listings, was reportedly seeking a flotation both in Hong Kong and the US. The exchange's review of H share listings is being held up because China has yet to announce the complementary regulations of the new Company Law. The review covered the roles of company secretaries and sponsors of the H share companies, and their information disclosure, said Mr Hui. He also admitted that the delay had stalled the listing schedule of forthcoming H share issues in the wake of the regulatory vacuum. But he noted that the exchange had continued its assessment of the qualities of the Chinese listing applicants and it had received about four applications from the second batch of H share offerings. Before July 1, when the Company Law was put into effect, Chinese listing candidates were incorporated in accordance with the Standard Opinion and the Addendum, which had now become obsolete. Participants expected the complementary regulation about Chinese enterprises listing overseas would be announced in the next few days. The securities authorities in Hong Kong and China will hold a quarterly meeting early next month under the Memorandum of Regulatory Co-operation, which was signed in June last year.