( this article first appeared on the Nikkei Asian Review)

The Shanghai Stock Exchange has submitted a letter of intent to buy a stake in the Pakistan Stock Exchange, The Nikkei Asian Review has learned.

The Chinese market operator intends to buy a stake of up to 40% in the PSX.

The PSX was formed in January by consolidating the Lahore, Karachi and Islamabad stock exchanges.

Ayyaz Afzal, former CEO of the Islamabad Stock Exchange, discussed the letter of intent during an interview with The Nikkei Asian Review. Afzal currently serves as a director at the National Clearing Company of Pakistan, a unit under the Pakistan Stock Exchange. He holds other posts as well.

“Shanghai is one of two stock exchanges who submitted us letters of intent,” Afzal said, also mentioning a bourse in the Middle East. Afzal also said the PSX could receive additional letters of intent by December, and “before March 2017, I think there will be some positive news about the strategic investor,” he said.

A Shanghai Stock Exchange source told The Nikkei Asian Review, that “there is nothing we can say for now.” The person did not deny that a letter of intent has been submitted.

Pakistan finds itself in the path of the Chinese government’s massive “One Belt, One Road” initiative. If the stock exchange deal falls China’s way, it could trigger large flows of private Chinese funding into Pakistan.

When the PSX was formed, it kept 40% of its shares in its own treasury. It now appears this treasury stock is to be sold off to form a capital alliance.

The selling price of the stake has yet to be determined, but the total assets of the Karachi Stock Exchange, the surviving post-merger company, came to 14.1 billion Pakistani rupees ($134 million) at the end of 2015. A total of 576 companies are listed on the PSX, with an aggregate market cap of slightly higher than 8 trillion rupees.