Mainland IPOs boost Hong Kong capital market
By Hui Ching-hoo (China Daily)Updated: 2006-11-16 14:29 Two massive mainland initial public offerings (IPOs) have helped Hong Kong overtake New York this year as the world's second-largest IPO market, according to a top financial official.
Capital raised from IPOs in Hong Kong in the first ten months of this year totalled HK$258 billion (US$33 billion), a leap of 76 per cent year-on-year, said Ronald Arculli, chairman of Hong Kong Exchanges and Clearing Ltd (HKEx).
At the same time, overall capital raised in the equity market through all fundraising methods including IPOs surged 44 per cent to around HK$393 billion (US$50 billion).
Bank of China (BOC) and Industrial and Commercial Bank of China (ICBC) raised roughly US$30 billion through their Hong Kong offerings.
Mainland companies have become the major players in Hong Kong's stock market, accounting for more than 30 per cent of the 1,100 stocks in the special administrative region. They accounted for around 44 per cent of the total market capitalization. Transaction of mainland company stocks constitutes 55 per cent of Hong Kong daily turnover.
Huge IPOs by mainland companies have also helped to boost market sentiment and drove the benchmark Hang Seng index to all-time highs in recent weeks, Arculli said.
Although most of the biggest mainland giants have already floated their shares in Hong Kong, it would be a mistake to say that Hong Kong will soon face a dearth of new listings, Arculli said.
"IPO activities will remain vigorous since a lot more mainland companies will
use the Hong Kong market as an international platform to raise funds," he said.
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