International companies seeking a listing are after improved valuation in the currently buoyant Hong Kong market.
In a survey released by international law firm Norton Rose, Hong Kong has been ranked Asia's most important stock exchange for listings ahead of Shanghai, Singapore, Sydney, Tokyo and is likely to remain so for the next five years. The results came out of a survey Global Financial Recovery: A Matter of Perspective, detailing the views of 314 financial professionals globally, including those working in banking, insurance and funds.
Hong Kong has attracted a number of high profile listings, such as those from Rusal and Prudential, from outside its traditional ambit of China-based businesses. The possibility to raise funds via a listing in Hong Kong constitutes an attractive alternative for many overseas companies with business operations in Asia said respondents. A listing enables them to tap into funds but is also a platform to establish and intensify economic ties to mainland China and other Asia countries, according to a Norton Rose report.
Jon Perry, Partner, Norton Rose Hong Kong said: "Hong Kong no longer sees itself merely as a gateway to China - in the long run, that mantle is likely to be taken up by Shanghai. Instead, Hong Kong has started to position itself as the venue where international companies can access Asian capital, and increase their corporate profile in the region.
"The listings of Prudential and Rusal are to an extent the tip of an iceberg - there are many more international companies who are currently exploring Hong Kong listings. The goal of many of the international companies seeking a listing in Hong Kong is for an improved valuation in the currently buoyant Hong Kong market - although it is generally thought that such a valuation will only be available if the applicant has a compelling Asian story," he said.
Separately, Hong Kong's financial services' regulations were also highly praised by respondents with 78% perceiving its regulatory regime as being a driver of growth. However, Singapore topped this category with a 94% rating.
Jon Perry said: "Singapore and Hong Kong are unsurprisingly way ahead of the others in terms of a regulatory environment perceived to be a driver of growth. As the financial services industry matures, it is recognised that regulation must strike a balance between being sufficiently liberal to attract financial institutions and being sufficiently robust to inspire market confidence."
The Global financial recovery: a matter of perspective report was undertaken by 314 global respondents and 62 Asia Pacific financial institutional professionals. The questions were fielded between 13 July and 17 September 2010 and answered by email and telephone.
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