PBOC head backs preferred shares

People's Bank of China Governor Zhou Xiaochuan is expressing support for preferred-share issues, which offer a new method for the nation's listed companies - especially banks - to raise capital.

Zhou, head of the central bank, wrote in an article posted on the PBOC website on Monday that preferred shares are "an effective way for a company to raise funds without changing its ownership structure". Such issues "help add depth to China's capital market", he wrote.

Financial shares rallied on Monday after rumors about allowing banks to sell such shares surfaced during trading hours.