London, June 17: UK-listed firms will become the first foreign companies to be able to list in mainland China under a new stock link, the Treasury said.
Chancellor Philip Hammond is due to launch the London-Shanghai Stock Connect on Monday. Firms will sell shares through dual listings on the Shanghai and London Stock Exchanges, said a BBC News report.
The UK government said the project will open up British firms to new investors. The initiative will also allow companies from each country to raise capital in the other.
"Stock Connect is a groundbreaking initiative, which will deepen our global connectivity as we look outwards to new opportunities in Asia," Hammond is expected to say at the launch, according to a statement from the Treasury."London is a global financial centre like no other, and today's launch is a strong vote of confidence in the UK market."
The London-Shanghai Stock Connect project has taken four years to develop. It will enable companies to list on both exchanges using depositary receipts.
More than 260 of the 1,500 companies listed in Shanghai will be potentially eligible to take part of the project and list in London. Kicking off the initiative, London investors will be able to trade the global depositary receipts of China's securities brokerage Huatai from Monday.
The UK is seeking to tap into China's growing market. China is expected to have more than $17 trillion ($13.5 trillion) in assets under management (AUM) by 2030, having had $2.8 trillion AUM in 2016. (UNI)