Preferred stocks seen as move to expand overseas

After much anticipation, the long-awaited unveiling in China of measures to allow companies to raise funds by selling preferred stock was announced on Friday by the China Securities Regulatory Commission.

This long-overdue initiative was perhaps hastened by the decision of Alibaba Group Holding Ltd to float on the New York Stock Exchange in preference to Hong Kong, partly because of the opportunity to issue preferred shares in the United States.

But what are the pros and cons of this move and will it lead to a sustainable boost to China's sluggish mainland stock exchanges?