Swimmer should refer to Huatai Securities. The Shanghai and Hong Kong listed company has previously confirmed that it will issue up to 82.5 million Global Depository Receipts (GDR) in London from June 11 to 14. If successful, its GDR will be traded on the main board of the London Stock Exchange on June 20.
Huatai Securities Excerpt
Huluntong is the interconnection mechanism between Shanghai Stock Exchange and London Stock Exchange. Listed companies in Shanghai and London can issue Depositary Receipt (DR) in each others market and connect the two markets through Huluntong mechanism.
According to the announcement, Huatai Securities is offering GDR at a price range of $20 to $24.5 per share and is expected to raise $1.65 billion to $2.02 billion in the UK market. If the issue goes smoothly, Huatai Securities GDR is expected to formally trade in the main board market of the London Stock Exchange through the Huluntong mechanism on June 20.
Huatai Securities originally planned to issue GDR in London in mid-December last year, but later delayed due to technical problems. At the end of May, the Central Bank and the State Administration of Foreign Exchange promulgated the Regulations on Cross-border Fund Management of Depositary Receipts (Trial Implementation), clarifying the rules for cross-border fund conversion of Depositary Receipts, and clearing the last obstacle for Huatai to issue GDR in London.
Huatai will provide international investors with an exposure to Chinas financial services market. With the rapid accumulation of personal wealth and the development of the capital market, the market has a strong growth momentum. Zhou Yi, chairman and President of Huatai Securities, said.
Foreign companies will be able to list domestically
The Sino-British Economic and Financial Dialogue is one of the three major high-level dialogue and cooperation mechanisms between China and Britain (the other two are strategic dialogue and high-level human-cultural exchange mechanism), which was launched in 2009. Huluntong is an important cooperation issue established during the dialogue in 2015, and has become the focus of most attention in recent years to expand financial cooperation between the two countries.
In an interview with our reporter in late March, Peter Estlin, the mayor of London, said that all tests of Huluntong had been completed and the UK was ready to start work.
Only high-quality companies are eligible to participate in Huluntong. According to the rules promulgated by the London Stock Exchange, the issuers of GDR listed on the London Stock Exchange and CDR listed on the Shanghai Stock Exchange must meet certain strict eligibility criteria. The issuer must have an average market value of at least 20 billion yuan ($2.9 billion) in 120 trading days prior to its application.
The value of Huluntong also lies in the fact that for the first time, foreign companies can be listed on the mainland of China, and listed companies on the Shanghai Stock Exchange will be able to raise funds overseas for the first time by means of interchangeable shares with their domestic counterparts.
Schweimer said Huluntong meant that we have the opportunity to work more closely together, to give companies more opportunities, to get more capital, and for investors, to invest more in listed companies on both sides of the market.
On June 13, the Shanghai Stock Exchange announced that the Huluntong Global Deposit Certificate (HGDR) and the Bank of Standard Bank Public Limited (IBSB) would be filed by the UK Cross-border Transfer Agency.
Prior to this, there have been three UK cross-border transfer agencies that have obtained Huluntong Global Depositary Certificate for filing, namely Barclays Bank, China International Finance UK Limited and Haitong International UK Limited.
Howard Davies, chairman of Royal Bank of Scotland and former chairman of the UK Financial Regulatory Services Bureau, pointed out that in the future, whether Chinese companies issue GDRs in London or British companies issue CDRs in Shanghai, regulators must be very transparent in their regulation of transactions and ensure a clean market and open exchange of information.