HK Bourse Sees More IPOs Of China Cos In Coming Months
HONG KONG (Dow Jones)--Hong Kong Exchanges & Clearing Ltd. (0388.HK) expects a number of major initial public offerings by mainland Chinese companies in the next few months, its Chief Executive Paul Chow said Monday.
The fourth quarter has been marked by IPO frenzy in Hong Kong, with four major listings in December alone raising a total of $3.41 billion led by China Life Insurance Co. (LFC), the world's biggest IPO this year.
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However, the resurgence of investor interest at the end of 2003 wasn't enough to fully offset the blow to fund-raising sentiment caused by the SARS outbreak in the second quarter, Chow said in the stock exchange operator's year-end review.
The number of new share listings in Hong Kong tumbled 40% this year to just 73. Still, the catch-up late in the year boosted the amount of money raised by IPOs by 13% on year to HK$58.9 billion.
This year, the Hong Kong stock market is the world's No. 8 in terms of market capitalization.
"I believe there are still some sizable mainland Chinese enterprises upcoming for Hong Kong IPOs in the next few months," Chow said. "But I can't speculate on the number of IPOs for the next year. It's actually up to the own will of those companies on the advice of their listing sponsors."
Insurance conglomerate Ping An Insurance Co. and Shanghai-based Semiconductor Manufacturing International Corp. are both expected to tap the Hong Kong capital market in early 2004. China's third-largest lender, China Construction Bank, non-state-owned China Minsheng Banking Corp. (600016.SH) and fixed-line operator China Netcom Group are also mulling overseas listing plans for next year.
The average daily turnover in the secondary market jumped 55% to HK$10.29 billion by Dec. 18, from HK$6.65 billion in 2002. Funds raised in secondary placements have reached HK$148.4 billion so far, more than double 2002's HK$58.5 billion.
Separately, the Hong Kong stock exchange said it has been in talks to explore cooperation with the Shanghai Futures Exchange on trading crude oil futures.
However, Deputy Chief Operating Officer Lawrence Fok said this will likely take two to three years to achieve because negotiations include issues regarding conversion of currencies and protection of investor interest, which may lead to amendments to some existing ordinances.
Meanwhile, discussions are mainly focused on the setup of the trading and clearing platforms, he said.
In April, both sides signed a memorandum of understanding to set up a joint venture to trade energy derivative products.
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