THE China Securities Regulatory Commission has not set a timetable to allow foreign companies to be listed on the mainland, an official with the watchdog said yesterday.

In an interview with the China Securities Journal yesterday, the official said that CSRC has set up the framework but is still studying the details. The CSRC said that relevant government bodies are still discussing and studying the mechanism for the international board that will allow foreign companies, such as Alianz, HSBC and General Electric, to issue yuan-denominated shares on the mainland.

The CSRC was responding to a government document that states "China will allow foreign companies to issue stocks on shore in due course."

The document, which aims to promote international business cooperation, was released by the State Council, China's Cabinet, last Friday. Its co-issuers included eight state-level authorities such as the top economic planner, the central bank and the finance ministry but the CSRC was left out.

An official with the Shanghai Stock Exchange also said yesterday the city "has no material plan" to launch the board in the near future, and the document was a guideline.

Analysts, however, said that the conditions to launch such a board are not right yet.

Xiang Weida, director of research at Great Wall Securities, said that from a financing perspective, supporting the financing of small enterprises is more urgent than the financing of foreign companies. It is not a good time for foreign companies to come, as the market is at an historical low.

The Shanghai Composite Index yesterday fell 2.7 percent, the largest daily loss since November 30. The stock market on China's mainland has been among the world's worst performing for the past two years.

"Sentiment in the domestic stock market is very low," said Liu Jipeng, a professor with China University of Political Science and Law. "The regulatory flaws on the mainland stock market are not yet solved, and introducing the new board would upset the current measures in clearing up the mess."

Li Daxiao, a chief researcher with Yingda Securities, said the board can only be launched when the economy is growing in a stable manner and when liquidity exceeds the fund-raising demands.

The proposal for the board first emerged in 2009. But it has been delayed amid unsettled regulatory issues and the volatile stock market.

The document also suggested opening the financial markets quickly, expanding the yuan's use offshore and letting more foreign investors buy a stake in domestic financial institutions.

Source:shanghaidaily