Nov. 18 (Bloomberg) -- The Shanghai Stock Exchange may allow big multinational companies to sell shares in China to expand the nation's capital markets, the official Xinhua News Agency said, citing Que Bo, assistant general manager of the bourse.

China's largest stock exchange may permit companies such as HSBC Holdings Plc, Coca-Cola Co. and Siemens AG to trade, and is conducting market research for the plan, the agency said.

Allowing overseas companies to sell shares in China may help accelerate government efforts to fully open the country's capital account, easing restrictions on inflows and outflows of yuan for investment purposes, said Liang Futao, an analyst at Shenyin Wanguo Research and Consulting Co. in Shanghai.

``This may suggest foreign companies can raise money in China and use the funds outside the country,'' Liang said today in a telephone interview.

China allowed the yuan to be freely convertible under the current account in December 1996, removing limits on the use of foreign exchange for trade in goods and services.

``The yuan will eventually become a freely convertible currency and China will open its capital account, even if we haven't set a clear timetable,'' Zhou Xiaochuan, governor of the People's Bank of China, said during an interview with reporters in Beijing on Oct. 18. ``China had agreed in principle to make the yuan convertible in the 1990s, but we halted the plan during the 1997 Asian financial crisis.''

In 2005, China gave approval to International Finance Corp., the World Bank's investment arm, and the Asian Development Bank to sell yuan-currency bonds in the country for the first time.

The Shanghai exchange now has 857 companies, according to its Web site. It has a market capitalization of 26.4 trillion yuan ($3.6 trillion), according to Bloomberg data.

To contact the reporter on this story: Jiang Jianguo in Shanghai at jjiang@bloomberg.net

Last Updated: November 18, 2007 00:33 EST