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HK becomes world's 2nd largest IPO market

(chinadaily.com.cn)
Updated: 2007-07-02 15:09

The Hong Konginitial public offering (IPO) market, with HK$333.2 billion (US$42.64 billion) raised last year, now ranks second in the world after London and followed by New York.

Hong Kong has attracted over 300 mainland enterprises to list there since 1993, raising US$200 billion worth funds.

Henry Tang, financial secretary of the government of the Hong Kong Special Administrative Region, said turnover ofH-sharesin the first five months of this year reached HK$5 trillion, exceeding the turnover for the entire 2005.

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Ronald Arculli, chairman of Hong Kong Exchanges and Clearing Limited, said the city provides a broad platform for mainland companies, not only with sufficient funds, but also with world-class financial management, information disclosure and enterprise management expertise.

Bank of Chinaset a world record by raising US$11.2 billion, the biggest IPO in six years. The success of Bank of China was a great encouragement to Hong Kong, said Arculli, because in the past few years, large State-owned enterprises could only raised enough money by simultaneouslygoing publicin Hong Kong and New York, but now they can do it in Hong Kong alone.

Tu Guangshao, vice chairman of theChina Securities Regulatory Commission, said with the signing of the Closer Economic Partnership Arrangement (CEPA), the securities industries in the mainland and Hong Kong are more closely related and more expertise is being shared.

He added that Hong Kong is an excellent springboard for mainland companies to go to the world and undergo international scrutiny.

More will be achieved as China expands the scope of the qualified domestic institutional investors (QDII) program and more companies go public in both the mainland and Hong Kong, Tu added.

Statistics show that currently a total of 145 mainland companies are listed in Hong Kong, and the turnover of red chips account for 60 percent of the market value of the Hong Kong stock market.