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Hong Kong Plugs Its Services For Emerging Economies

by Mary Swire, LawAndtax-News.com, Hong Kong

30 November 2011


Financial Secretary, John C Tsang, speaking at the recently-held 2nd Annual Emerging Markets Conference, said that Hong Kong, so as to achieve a more diversified business portfolio, will continue to strengthen trade and investment co-operation with emerging economies.

Tsang noted that, in October, the Hong Kong stock exchange (HKEx), together with exchanges in Brazil, Russia, South Africa and India, announced an initiative to cross-list their respective benchmark equity index derivatives. The idea is to develop products that track the exchanges in the so-called BRICS group of emerging economies and strengthen the financial links between them.

In his opinion, Hong Kong, in its discussions with emerging economies, brings many advantages to the table. For example, in 2009 and 2010, Hong Kong led the world in total funds raised through IPOs, and, despite the current market volatility, more IPOs are coming on stream, and Hong Kong still has “a sizeable queue”.

He added that a common factor among BRICS economies is natural resources - in terms of both demand and supply – and Hong Kong’s efforts in attracting mineral company listings have been well received. Last year, Tsang said, Robert Friedland, Executive Chairman of Ivanhoe Mines, predicted that Hong Kong would "become the largest mining finance market in the world."

In June last year, HKEx introduced new listing rules for resource companies. Its aim, he continued, “is to strengthen the role of HKEx as the key international capital market for mining and natural resource firms.”

As at the end of September this year, 169 companies listed in Hong Kong were pure metals and mining or energy companies. Companies listed in HKEx engaged in the mining and resource sectors account for about 17% of total market capitalisation, which is about USD2.1 trillion.

Furthermore, to broaden the source of listings, HKEx is reviewing all requirements for overseas companies, including those seeking secondary listings in Hong Kong. He confirmed that the government “will further assist overseas companies to list in Hong Kong, without compromising the standard for listing, particularly with regard to investor protection.”

A comprehensive report in our Intelligence Report series giving a country-by-country analysis of offshore investment funds, stock exchanges and trusts, with an analysis of the US QI regime, is available in the Lowtax Library at http://www.lowtaxlibrary.com/asp/subs_reports.asp and a description of the report can be seen at http://www.lowtaxlibrary.com/asp/description_report9.asp
TAGS: Russia | South Africa | investment | business | India | mining | energy | capital markets | equity investment | offshore | stock exchanges | Brazil | Hong Kong | Africa

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