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(Alliance News) - London Stock Exchange Group PLC said Wednesday shares can now be admitted to the Shanghai-London Stock Connect.
The programme is part of a plan to link Shanghai's public equity markets with the London Stock Exchange. The scheme could see global investors trading shares in Chinese companies and Chinese investors buying shares in London-listed companies.
LSE said the market is a "milestone" and brings the capital markets of London and Shanghai together.
The programme will see Shanghai-listed firms listing global depositary receipts in London - on a newly created Shanghai Segment of the International Order Book - and creating an equivalent 'A' share to be listed in Shanghai.
If a London-listed firm is looking to raise capital from Chinese investors, the company will see China Depositary Receipts listed on the Shanghai Stock Exchange Main Board, treated like domestic 'A' shares with an underlying share in London.
The programme is only open to companies with a market cap of USD2.9 billion.
The first company from either Shanghai or London to list on the Stock Connect is Chinese broker Huatai Securities Co Ltd.
Huatai is offering GDRs at a price between USD20.00 and USD24.50. The final price will be determined following a book-build, which is expected to end on Friday.
Assuming the maximum number of GDRs are acquired, Huatai will raise between USD1.65 billion and USD2.02 billion.
Huatai Securities - a brokerage and wealth management business - will offer up to 82.5 million GDRs, with each GDR representing 10 A shares of the company, which will be listed in Shanghai, China.
HSBC Holdings PLC was rumoured to be planning to list in Shanghai as part of the programme, making it the first foreign company to trade on a Chinese stock exchange. Chief Executive John Flint, however, stressed it was "too early" to discuss the plan when the lender announced its third-quarter results in October.
Shares in LSE closed down 0.7% Wednesday at 5,408.00 pence each.
