May 31, 2011
Best Growth Stock Coca-Cola, the producer of soft drinks in the world, is negotiating with the Chinese authorities in order to cast its shares in the Shanghai Securities Exchange (SSE).
As announced it few days ago Geoff Walsh, director of communications of Coca-Cola for the Asia-Pacific region, the company is contemplating seriously the possibility of issuing shares on the Shanghai Stock Exchange; negotiations with the Chinese Government are very well under way.
Allow the emission, Coca-Cola would be the first Western company with a presence of this kind in the Asian giant, whose Government does not allow foreign companies to issue shares on the Mainland of the country.
The stock exchange of Hong Kong (HKSE for its acronym in English) is the only place in China where can trading shares of foreign companies.
For many experts in the field, the entry of Coca Cola to mainland China would trigger an effect dominoes for many Western companies:
Without a doubt, Coca-Cola is all an American icon. They will be the first among many and approve the issuance of shares of foreign companies in mainland China, we could expect a flood of companies to take part in the Chinese stock market, noted John Quelch, Dean of the Chino-Europea School of international business in Shanghai.
If approved the proposal, this would be a historic moment for the relationship between Coca-Cola and China, because even though the American company opened its first bottling plant in Shanghai in 1927, the Communist regime expelled in 1949 to the famous manufacturer of soft drinks as a symbol of American imperialism.
After the start of economic reforms that transformed the country, Coca-Cola returned to China in 1979.
In addition to Coca-Cola, several Western companies have expressed interest in presenting themselves to the Shanghai Stock Exchange: HSBC, Unilever and Standard Chartered are interested in the steps of the American giant.
Currently, China is the third country with the largest stock market in the world, after United States and Japan.
Participate in the Shanghai Stock Exchange, Coca-Cola would quickly enter a market solid and growing investor and to Chinese investors could invest in the company without having to assume the risks involving the variable exchange rates.
It is worth remembering that China represents the third largest Coca-Cola in the world market, after United States and Mexico. In the 2011 sales in the Asian country have shown a behavior quite favorable and growth trend, while in Europe and North America, the situation remains the same.
Negotiations to allow stock market participation of foreign companies in mainland China started since 2007. However, the financial crisis of 2008 delayed the negotiation process.
Even if you have a scheduled date, expected that the Chinese Government authorized the issuance of shares of foreign companies in mainland China by the end of June. This would allow the first broadcast of international actions in Shanghai will be held in the month of October.
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Posted by Harrison Geneff | Tags: Exchange