Hong Kong emerges as Asia-Pacific's top listing hub

Oct. 19, 2010 - PRLog -- Majority of the respondents in a survey conducted by law firm, Norton Rose ranked Hong Kong's Stock Exchange as the most important stock exchange in Asia-Pacific over the next five years. Hong Kong emerged as the top listing destination, beating not only its arch rival Shanghai but also racing ahead of Singapore, Sydney, and Tokyo.

This year, the Hong Kong Stock Exchange has been witnessing an extraordinary boom in IPOs by various large international companies. Brazilian mining group, Vale has announced plans of listing on the Hong Kong Exchange as it wants to reach out to its biggest market - investors in China. Russian aluminium giant US Rusal listed itself on the Hong Kong Exchange in January this year. Following suit, as many as five Russian companies may list on the HKEX by 2012. Prada is considering listing in Hong Kong in order to cater to investor appetite for luxury goods companies in Asia. As part of its expansion plans in the Asian region, French cosmetics company L'Occtaine listed in Hong Kong in May this year. Kazakhstan, which is known for its resource and mineral companies has picked Hong Kong as its current listing destination in Asia. Kazakhmys, a copper mining company and ENRC, Central Asia's major mining company are among the several multi-billion dollar Kazakh companies to consider pursuing a listing in Hong Kong. Responding to China's demand for raw material and energy, Mongolian Mining Corp was the first company from Mongolia to list in Hong Kong recently. AIA is slated for a Hong Kong listing later this month and is expected to raise up to US$15billion. Note however that these listings are only the tip of the iceberg.

It is estimated that Hong Kong IPOs raised $31 billion last year; the highest ever as compared to any other location in the world. Hong Kong has been gaining popularity as a listing destination for various reasons. One of the biggest draws is that by listing in Hong Kong, issuers can gain exposure in the rapidly growing mainland China market. Secondly, Hong Kong's strict legal environment serves to boost investor confidence. Furthermore, Hong Kong's listing rules and corporate governance requirements are comparable with international standards. The Hong Kong Stock Exchange is reputed for transparency and integrity. Hong Kong's trading and settlement systems are efficient, secure, and convenient. This helps in creating greater access and liquidity for a listed company’s investors. Finally, Hong Kong places no restrictions on capital flows or the transfer of securities or convertibility of its currency.

According to Michael Malterer, Partner, Munich, Norton Rose Munich,"Due to the favorable investment climate in Hong Kong as one of the leading financial centres in the world with continuous growth as opposed to the still strained markets in Europe, the possibility to raise funds via a listing in Hong Kong constitutes an attractive alternative for European large and medium sized enterprises with business operations in Asia. A listing in Hong Kong, however, is not only a means to raising funds, but also to providing a platform to establish and intensify the economic ties to Mainland China and other Asian countries due to the strong business relations to other Asian economies which Hong Kong offers."

The survey also ranked Hong Kong's financial regulatory environment as the second best in Asia-pacific. As Hong Kong closes in on London and New York as one of the world's major financial centers, it is becoming a popular destination for international companies seeking expansion in Asia. Hong Kong's tax system (http://www.guidemehongkong.com/tax/c753-hong-kong-tax-sys...), the ease of Hong Kong company setup (http://www.guidemehongkong.com/company/c745-hong-kong-com...), access to China, and a robust financial system are but some of the reasons why foreign companies are heading towards Hong Kong.

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