Hong Kong's Stock Exchange Powering Ahead In China Boom

by Mary Swire, Investors Offshore, Hong Kong

01 January 2004

Hong Kong's Hang Seng index seems likely to end the year on a high note, closing on Wednesday just shy of its peak this year at 12,526.74. Mainland stocks, some listed just recently, were the driving force behind the good market performance, which turned in a near-record volume for the year of nearly HK$24bn.

The good news may well continue in the New Year, with a PricewaterhouseCoopers report forecasting more than 100 new listings next year, raising more than HK$100bn, which would be the highest amount raised since 2000. As with the index, it will be mainland stocks that underpin the flotation boom.

PwC projects much of the volume from mainland financial institutions such as banks or insurance companies, and says that HK$20 billion will be raised by airlines and telecommunications companies. The first listing of a major mainland bank is widely expected to be China Construction Bank, with a plan to raise US$5 billion, while Peoples Telephone and Air China are both planning HK$1bn listings.

Domestically, the main SAR event on the stock market is likely to come from the government as part of its 5-year HK$112.5 billion asset disposal and securitisation programme.

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