 After
a fantastic year for IPO's on the Hong Kong Stock Exchange (HKEx),
it was not at all surprising that a standing-room only crowd at
the Prospectus and Developers Association of Canada (PDAC 2010)
Convention in Toronto was eager to hear from visiting Secretary
for Financial Services and the Treasury, Professor K.C. Chan,
and HKEx Chairman, Ronald Arculli, about Hong Kong and on how
HKEx has become one of the most active markets in the world.
HKEx ranked Number 1 globally in 2009 for IPO fundraising
(US$31.3 billion), and Number 4 globally in terms of total fund
raised, including post-IPO, of US$81.4 billion. A total of 73
companies were newly listed on HKEx and they included overseas
companies which have listed their Greater China related business
operations in Hong Kong. "Companies are attracted to list in
Hong Kong to benefit from our market's liquidity, attractive
valuations and access to investors in Asia," said Professor
Chan.
2010 has already started off well, Professor Chan said at the
PDAC Seminar in March on "Listing and Capital Raising in Hong
Kong for Mining and Natural Resources Companies", with SouthGobi
Energy Resources, owned by Canada's Ivanhoe Mines, raising
USD$439 million through a secondary listing on the HKEx, just
days after Russia's UC Rusal, the world's largest aluminium
producer and the first ever non-Asian company to have a primary
listing in Hong Kong, raised USD$2.24 billion.
It is expected that at least nine other foreign mining companies
will be listing in HKEx this year, said the Secretary, some of
which are from Canada. Professor Chan encouraged Canadian
natural resources companies in particular to list on the HKEx so
as to take advantage of China's seemingly insatiable appetite
for raw materials, as well as the liquidity afforded by the
Mainland's wealthy, upper and middle-class who are very active
investors on the HKEx. He pointed out that companies
incorporated in British Columbia and Ontario are acceptable for
listing in Hong Kong and that HKEx has adopted international
standards and practices to facilitate dual listings, with no
capital controls and no capital reporting requirements.
But market liquidity is only one reason why Hong Kong is the
financial centre of choice by Asian companies seeking to raise
capital, including over 520 Mainland enterprises having a total
market capitalization of over C$1.3 trillion. Hong Kong has
always been an important gateway to China and close cooperation
between the two, such as with the Closer Economic Partnership
Arrangement (CEPA) and a variety of specific projects with
Guangdong Province and the Pearl River Delta Region to enhance
financial products, capital and talent, further strengthen Hong
Kong's intermediary role.
 "With
a highly open and international financial platform and the
unique advantage under the ‘One Country, Two Systems', Hong Kong
is best positioned to serve as a gateway to China to capitalise
on China's growth," Professor Chan said. Investors have a fair
and open playing field in Hong Kong which attaches great
importance to corporate governance and transparency in
maintaining a high quality market.
Hong Kong has also weathered the financial tsunami better than
most of the world's countries and the government is cautiously
optimistic that 2010 will bring continuing improvement. The job
market and overall economic performance both indicate that Hong
Kong's economy has shown great resilience in the face of
external economic shocks. Residing next door to the world's
strongest economy, Professor Chan said, Hong Kong provides an
abundance of business opportunities. For, despite the world
recession, China's economy still grew at astounding 8.7% in 2009
and will reach 10% in 2010. Now is the time, he said, for Hong
Kong and Canada to ride the wave of a rising China.
Immediately upon his arrival in Toronto, the Secretary for
Financial Services and the Treasury delivered a keynote speech
at the Confederation of Greater Toronto Chinese Business
Association annual gala "Oriental Fantasia – Hong Kong and
Shanghai". He told the 700 guests there that "Hong Kong and
Shanghai serve different financial markets," and both have
different skill sets and are at different stages of development.
"We look forward to co-operating with Shanghai to exploit our
relative strengths, share our experiences and maximise the
synergy between us in becoming the twin engines of growth for
our nation," Professor Chan said.
The Secretary also spoke on "China's Rise as an Economic Power"
at the Rotman School of Management of the University of Toronto
during his whirlwind visit. He reminded his audience that "the
new wave of financial globalisation has brought a new wave of
financial talent to Asia, and to Hong Kong."
"As countries in the West continue to grapple with the aftermath
of the financial tsunami, Asia is rebuilding, refocusing and
rebounding," Professor Chan said. "Hong Kong is a vantage point,
actually the best available platform, for seeking out the best
opportunities in China and throughout Asia." |
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