The Release Of The Shanghai And Hong Kong Dual-listed Companies

Dual-listing,also known as cross-border listing refers to a company's stock at the same time listed on the inside and outside(the two or more) market,is an important financing mechanism.For a large-scale enterprise,due to huge demand for financing, it is bound to bring pressure on the market,choose one or more markets to finance should be considered.While having new investment opportunities,the choice in the existing market refinancing against or to different places should also be considered.In a mature capital market,the company dual-listing stocks are very common phenomenon.Although some scholars have questioned the performance of dual-listing,but still the mainstreams view that there are many advantages of dual listing.Since August 27, 1993 Qingdao Beer(H shares) returned to the Shanghai Stock Exchange issued A-shares and listing,the phenomenon of the company's stock at the Stock Exchange of Hong Kong and the Mainland dual listing get more and more.At the end of August 2008,while in Hong Kong and the mainland securities market dual-listed Chinese companies a total of 56.It can reasonably be expected,the future of dual-listed companies will be more and more.At present,the dual-listed shares in issue with regard to the following questions:First,the order issued arrangements.Market mechanisms to achieve double the issuance of the order include:(1) " first H late A" model;(2) " first A late H" model;(3) "A + H simultaneously issued" model.Analysis of their differences,for the future of the issuing and listing policies provide a theoretical basis.Second,the return of A-shares issued model.China's overseas listing of large-scale Corps,an increasing number of overseas listed companies will be returned to the A-share market.Although large-scale H-share companies has returned to the A-share market,but the red-chip companies has not been successful return to the case.H-shares on a timely return to sum up the experience are necessary.The issue of the reunification model include:(1) directly in the A-share market IPO;(2) A shares convertible absorb the merger of existing companies;(3) China Unicom mode; (4) the creation of China Depository Receipts(CDR).Each model has its advantages and disadvantages,overseas listed companies should take to issue the best mode. Long-term perspective,China's capital market will be open,orderly,and well-known and will eventually be an international capital market,foreign companies will be permitted to list on the A-share market;the successful return of overseas listed companies will give them the helpful experience.Third,achieve the regulatory cooperation of the dual listing.The Mainland and Hong Kong stock market eventually moves toward integration.But at this stage,in the development of new shares resources there is a certain competition between the Mainland and Hong Kong regulatory,competition will lead to "reduce the regulatory standards of each other" (race down the bottom),the protection of the rights and interests of investors adversely.Dual-listed companies would help to alleviate conflicts,and the Mainland and Hong Kong should know how to carry out supervision cooperation,which is currently an urgent need to address the problem.This paper will focus on the issue of dual listed on the order of overseas companies return to the A-share market model chosen,the return of red-chip companies to provide solutions,coordination between the two places and the issue of the Hong Kong regulatory cooperation.In this paper, the content and structure are as follows:Chapter 1 Introduction.Main topics on background,the significance of topics, a brief review of existing literature.Chapterâ…¡Review dual listing of the global status quo and Literature.Early literature major concern of dual listing that can raise share prices,liquidity;lower cost of capital,enhance the investor base.Recent literature mainly from the perspective of corporate governance inspection that the dual listing could provide a legal bonding effect,raise the level of information disclosure,implement effective supervision through foreign capital markets.Dual listing on the domestic capital markets, including the impact of the spillover effects and the effects of segregation,but it is difficult to determine the net effect.Chapterâ…¢A rational analysis to dual-listed Chinese companies(â… ).The policies of dual listing are unsteadily and the public had no reasonable thinking about dual listing.The research about performance of dual listing corporate is not objective by far.Dual listing may be one market choice of the firm based on the asymmetric information perspective.H share corporate came back to A share market will help to solve problems such as SEO,equity partition,and to broaden China capital market. The positive analysis showed that H share corporate listing on A share market had cooled the bubbles.Chapterâ…£A rational analysis to dual-listed Chinese companies(â…¡).Mainland companies went to listing on Hong Kong,including red chips and H-shares model, and which one be more suitable based on the environment.No evidences show that H share be systematically lower priced compare to other IPOs in the same time and the same market.While oversea listing get the money the firm needed,there also exist the problems such as sacrificing the interests of the mainland investors,mainly benefiting foreign institutions and so on.Chapterâ…¤The choice of dual listing offering order.The IPO mode of First H Late A is suitable for the oversea corporate coming back,Because A+H simultaneously IPO had problems about coordination,although there had two successful cases,in the future it will be skeptically to be the mainstream modes.After the limited shares being marketable,The market may have a longer downturn," First A Late H" should be the issue of the future mainstream models.Chapterâ…£A comparison between IPO model and cross-market merger of absorbing model.Compared to cross-market merger of convertible absorbing model, the IPO mode has disadvantages including a bear market environment IPO impractical,difficult to resolve intra-industry competition and related trade issues. Cross-market model has the advantages including the realization of the A-share market listing,with the industry to resolve the issue of competition,easing pressure on the merger of the necessary financing,access to synergies;Drawbacks include the cost of the merger being uncertainty,losing a good opportunity to cash financing and need complex approval procedures,and so on.The basic principle of cross-market mode is that both sides shareholder wealth can not be reduced after the merger,the article also introduced the successful case of China's Aluminum Industry.Chapterâ…¦Innovation models of red chips to return A share market.The topic of Red-chip company's return to the A market had been a lively discussion,there are three models to select:Direct IPO,China Unicom mode,CDR model.IPO need less supporting policy measures,but has the shortcomings such as existing or incremental stock offering controversy,the obstacles of legal qualifications.These shortcomings all can be overcome,the reasons for the management's delay in approval of the return of red chips is worried about China's capital market opening-up process too quickly, as well as how to coordinate the interests of Hong Kong issues.China Unicorn mode need special approval by the State Council,so there is no promotional value.CDR creation of red-chip companies is ripe,instead of allowing investors to invest abroad, creating some new investment tools such as CDR,investors can buy the company's stock in the hometown,CDR can also avoid such as the legal obstacles,the storage and incremental struggle of IPO mode,CDR can coordinate effectively the Mainland and Hong Kong market's interests.Chapterâ…§The issues of dual listed regulatory cooperation.The history of two places on the H-shares and red chips regulating cooperation has both successful experiences and lessons.At new stage,the new problems need solutions such as the return of red-chip companies,the competition of listing resources between the two sides,the cross-border price manipulation,the cross-border gray capital flows,the par value,the major shareholders cross-border arbitrage problems.The two sides should learn from EU successful experiences and improve the regulatory cooperation.Chapterâ…¨Conclusions and policy suggestions.