June 22, 2010 (Chinavestor) In a bid to become a leading global financial center by 2020, Shanghai is preparing to allow foreign firms to list shares and sell debt on its financial markets. China's households and corporations have a vast pool savings, $7.3 trillion by some estimates, for foreign companies to tap into.
UBS (NYSE:UBS) said Dow components such as Coca-Cola (NYSE:KO), General Electric (NYSE:GE) and Wal-Mart (NYSE:WMT) could seek Shanghai listings for their shares. The Shanghai Stock Exchange is in the process of drafting rules for the board where foreign companies will be allowed to sell shares, Bloomberg reported.
Goldman Sachs (NYSE:GS) noted that China's bond market is small when measured against comparable economies, such as the U.S. and Japan, with just $2.4 trillion in notional debt outstanding. Goldman Sachs (NYSE:GS) also called China's equity markets “relatively immature.”
International firms are currently restricted from selling Yuan-denominated bonds in China. Foreign companies may be allowed to sell bonds in China without using local units within months as the government expands capital markets, Bloomberg News reported, citing UBS (NYSE:UBS).