Tech firms may return home via new board

Platform to boost listings of high-tech and innovation-led companies, says CSRC

Overseas-listed Chinese technology companies will soon be able to return to the home market as China will roll out a strategic emerging industries board on the Shanghai Stock Exchange dedicated for listings of high-growth and innovative enterprises, top securities officials said on Friday.

"The new board must be launched next year," Fang Xinghai, vice-chairman of the China Securities Regulatory Commission, told a news conference.

While the new Shanghai board is not an exclusive market for overseas-listed technology companies, it will pave the way for their eventual relisting in the domestic market.

"It is an abnormal phenomenon that many Chinese technology companies list their shares in overseas markets when the Chinese capital market has developed substantially," Fang said, noting that the mainland market should be the main listing option for leading Chinese technology companies in the future.

Huo Da, director of the market department at the CSRC, said the specific listing requirements and rules as well as the trading mechanism are being drafted by the regulator.

"The launch of the new board will see concrete progress next year as China works on transforming the approval-based initial public offering mechanism into a registration-based one, he said.

Many well-known US-listed Chinese Internet companies including search engine Baidu Inc and web portal Sina Corp have expressed interest in returning to the A-share market where they are likely to enjoy higher valuations and better investor recognition.

The recent $9.3 billion privatization of Qihoo 360 Technology Co, China's second-largest search engine, is the latest sign that Chinese companies are renewing their interest in delisting from United States bourses to sell shares in the home market for a higher valuation.

The creation of the board has also been viewed as part of the government's latest effort to reduce fundraising costs for the country's small and innovative enterprises amid a slowing economy.