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Listing in Hong Kong
1、brief introduction about List
Companies list their shares for reasons that are unique to the particular circumstances of each company and its shareholders and management. A company may seek a listing because its shareholders would like to realise part of their investment; or because it lacks the funds to expand its business operations. Whatever your company's reasons for listing, a listing status could offer a company the following advantages:
(1).Access to capital for growth with opportunities to raise funds both at the time of listing and at later stages
(2).Broader shareholder base could potentially lead to a more liquid market in the trading of the company's shares
(3).Employee incentive and commitment resulting from the grant of employee share options to tie in the company's key staff
(4).Higher profile and visibility in the market could generate reassurance among the company's customers and suppliers
(5).Increased corporate transparency could lead to the grant of credit lines on more competitive terms from the company's bankers
(6).Greater efficiency resulting from rigorous disclosure standards demanded of listed issuers will lead to an improvement in their control, management information and operating systems
Whatever your reasons for listing, it is important that you consider and discuss with your advisers all the factors which are specific to your company and the vision of its management.
2、Advantages of Listing in Hong Kong
Once a company has decided to pursue a listing, it must also consider a suitable market on which to list its shares. In this connection, some of Hong Kong's advantages as a listing venue are set out below:
(1)Gateway to Mainland China
With close trading and business links to other Asian economies, Hong Kong is strategically placed in a high growth region. As an internationally recognized financial centre with an abundance of professional expertise, our Exchange has provided many Asian and multinational companies with fund-raising opportunities.
(2)Leveraging on Mainland China's Growth
Hong Kong provides an ideal platform for issuers to achieve exposure in the rapidly growing Mainland Chinese market. Together with China's accession into the World Trade Organisation (WTO) and Beijing's hosting of the Olympics in 2008, companies will be able to leverage on the multitude of opportunities offered by this escalating economy.
(3)Home Market Theory
As Hong Kong is part of Mainland China, our market is the first choice for Mainland Chinese companies seeking a listing on an international overseas market. The applicability of the "home market" theory is reinforced by the statistic that a significant portion of the trading value of Mainland Chinese enterprises is conducted in Hong Kong where such companies have a dual listing in Hong Kong and another major overseas exchange.
(4)Strong Legal System
Hong Kong has a well established legal system based on English common law which provides a strong and attractive foundation for companies to raise funds as well as confidence to investors.
(5)International Accounting Standards
Apart from Hong Kong Financial Reporting Standards and International Financial Reporting Standards, our Exchange also accepts the use of generally accepted accounting principles in the United States of America ("US GAAP") or other accounting standards by new applicants under certain circumstances.
(6)Sound Regulatory Framework
Our Listing Rules are on a par with international standards and demand from listed issuers a high level of disclosure. Our stringent corporate governance requirements ensure that investors have access to timely and transparent information which allows them to appraise the position and prospects of the companies.
(7)Free Flow of Capital and Information
With zero capital flow restrictions, numerous tax advantages, currency convertibility and the free transferability of securities, Hong Kong offers an attractive market for both issuers and investors alike.
(8)Advanced Clearing and Settlement Infrastructure
Hong Kong boasts sound and solid securities and banking sectors which are supported by a strong trading, clearing and settlement infrastructure. Further, the Hong Kong Monetary Authority's US Dollar Clearing System allows local financial institutions to settle US dollar transactions real time in the Asian time zone against the delivery of Hong Kong dollars, instead of 12 hours later in the New York time zone. This reduces the foreign exchange settlement risk caused by the time gap between the settlement of Hong Kong dollars and US dollars.
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