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HK To Attract Mainland IPOs, Says Yam

by Mary Swire, for LawAndTax-News.com, Hong Kong

03 November 2006


The continuing growth of the Mainland economy augurs well for Hong Kong as a centre for initial public offerings and other fund-raising activities by Mainland enterprises, Monetary Authority Chief Executive Joseph Yam suggested on Thursday.

In his latest Viewpoint article, published yesterday, Mr Yam said several large initial public offerings had been organised successfully in Hong Kong, with no excessive volatility in the interbank rates or hiccups in the interbank payment system on the payment and refund days.

He announced that:

"One interesting phenomenon observed during the course of the large initial public offering activities in Hong Kong is that, with global financial markets awash with liquidity, whenever there is new supply of quality financial instruments in a market of international standing, attracting international investment funds is not a problem."

"There seems no longer to be any need, for example, to organise primary or secondary listing in Europe and America in order to attract investment funds from those areas. International road shows are of course still essential to stimulate investor interest, but advanced information technology is increasingly making this easier. So I hope these large initial public offerings serve to consolidate the status of Hong Kong as the preferred initial public offering centre for Mainland enterprises."

Noting that the Mainland has become increasingly integrated with the rest of the world and its economy keeps growing at a brisk pace, Mr Yam suggested that there will be more and more Mainland enterprises achieving success in their own fields and attaining international status.

While this augurs well for Hong Kong as a centre for initial public offerings and other fund-raising activities by Mainland enterprises, particularly those intending to go international, he cautioned that the savings rate on the Mainland is still very high and therefore there is great investor demand there that needs to be satisfied.

"The sustainability of Hong Kong as the initial public offering centre for Mainland enterprises depends, I think, on whether we can satisfy investor demand on the Mainland," he observed.


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