ipo in hong kong – your international capital formation centre in asia
DESCRIPTION
IPO in Hong Kong – your international capital formation centre in Asia. Hong Kong Exchanges and Clearing Limited 26 September 2007 Almaty Kazakhstan. Listing of CIS banks in Hong Kong. Hong Kong is the nearest IFC from Kazakhstan and many CIS countries Almost the same time zone - PowerPoint PPT PresentationTRANSCRIPT
IPO in Hong Kong – your international capital formation centre in Asia
Hong Kong Exchanges and Clearing Limited
26 September 2007 Almaty Kazakhstan
2
Listing of CIS banks in Hong Kong
• Hong Kong is the nearest IFC from Kazakhstan and many CIS countries
• Almost the same time zone• Investors and investment banks have experience in
restructuring and listing banks from China• Very favorable PE valuations for banks in emerging
economies• Many of the world’s largest financial institutions with
sophisticated understanding of banks in emerging markets are headquartered in Hong Kong
3
Source: WFE – World Federation of Exchanges (as of Aug 2007), Nasdaq data as of Jul 2007
HKEx ranks 7th among global exchanges
New York(1st: USD15,590 bil)
Tokyo(2nd: USD4,518 bil)
Hong Kong(7th: USD2,276 bil)
London(5th: USD3,854 bil)
Shanghai(6th: USD2,382 bil)
Singapore(21st: USD483 bil)
Shenzhen(19th: USD707 bil)
4
Total fund raised amount by global stock exchanges in 2006
Source: WFE (Jan – Dec 2006)
World’s largest IPO -
Industrial and Commercial Bank of China LimitedIndustrial and Commercial Bank of China Limited raised about USD16 bil in Hong Kong on 27 Oct 2006
27
Total fund raised (USD bil)
8
Rank
26
IPO equity fund raised (USD bil)
4
Rank
Euronext
Stock Exchange
67
95
3
2
43
56
2
1
103 137 3 NYSE
London
Hong Kong
… …
17 5 Singapore 6 22
5
Global top 5 IPOs from Jan 2005 to Aug 2007 – 3 were listed in Hong Kong
Rank Name of IssuerCountry / Area
of originDate of listing
IPO fund raised
(USD bil)
Inter-national offering
1Industrial and Commercial Bank of China Ltd
Mainland China 10/2006 16.0
2 Bank of China Ltd Mainland China 6/2006 11.2
3 OAO Rosneft Oil Co Russia 7/2006 10.7
4China Construction Bank
Mainland China 10/2005 9.2
5 VTB Bank Russia 5/2007 8.0
Hong Kong can conduct super large IPOs
Source: Bloomberg
91%
91%
93%
6
Competitive P/E ratio among other securities markets
Source: Taiwan Stock Exchange website (as of June 2007)
12London
15Korea
1818
18New York
P/E RatioMarket
Singapore 16
Hong KongHong Kong
7
1,176%
172%
388%
166% 156% 155% 130% 107%
0%
200%
400%
600%
800%
1000%
HK MainlandChina &
HK
Singapore UK Canada USA Korea Japan
Market capitalization (Jul 07) vs GDP (06) ratio
Source : International Monetary Fund & World Federation of Exchange
High % of Market Cap / GDP = High degree of internationalization
8
The Heritage Foundation has rated Hong Kong as…
for 13 consecutive yearsfor 13 consecutive years
NoNo trade barrier Complete freedomComplete freedom of capital flow Well- establishedWell- established rule of law LowLow taxation ExtensiveExtensive banking and service industry that is regulated non-
intrusively and transparent
Source: 2007 Index of Economic Freedom published by The Wall Street Journal and The Heritage Foundation
9
The City of London Corporation :Hong Kong’s competitiveness as a financial center…
Source: Research on the Global Financial Centres Index by The City of London Corporation, Mar 2007
“Hong Kong is a thriving regional centre. It performs well in all of the
key competitiveness areas, especially in regulation… Hong Kong is a real contender to become a genuinely
global financial centre.”
People
MarketAccess
BusinessEnvironment
InfrastructureGeneral
Competitiveness
No. 1 in Asia & No. 3 in the worldNo. 1 in Asia & No. 3 in the world
10
The Hong Kong market accommodates issuers of different size
80
484452
160
30
0
100
200
300
400
500
<100 mil 100 mil-1 bil 1-10 bil 10-100 bil >100 bil
No. of Companies
Market Capitalization (HKD)Source: HKEx
47% of the listed issuers’
market capitalization is less than
HKD1 bil
Market capitalization of the 1,206 listed Hong Kong companies (as at 31 Aug 2007)
11
0
20
40
60
80
100
120
<100 mil 100 mil-1 bil 1-5 bil >5 bil
Mainland Enterprises
Others
No. of newly listed companies from Jan 2003 – Aug 2007
IPO fund raised(HKD)
% of Total Newly Listed Companies*
28% 39% 24% 9%
Mainland Enterprises 11% 22% 15% 7%
Others 17% 17% 9% 1%
33
67
46
22
50 51
26
4
We have expertise in IPOs of different sizes
Note: Excluding 19 companies which were listed by introduction and 6 Real Estate Investment TrustsSource: HKEx
No. of companies
12
Brokers come from different parts of the world
Number of Overseas Brokers
0
5
10
15
20
25
30
MainlandChina
TaiwanRegion
US Japan Malaysia Singapore Canada France UK Belgium Others
2322
17
3
27
45578
11
Origin of the 132 overseas brokers in Hong Kong
“Others” include brokers from Switzerland, Netherlands, Australia, Germany, Philippines, Thailand, etc
Source: HKEx (as of June 2007)
13
Overseas institutional investors, 39%
Overseas retail investors, 3%
Local institutional investors, 26%
Local retail investors, 27%
Brokers' principal trading, 5%
Listing in Hong Kong provides exposure to a diversified international investor base…
Source: HKEx Cash Market Transaction Survey 2005/06
42% of cash market trading are generated from overseas investors
65% are generated from institutional investors
USA, 26%
UK, 24%
Europe, 23%
Asia, 21%
Others, 6%
14
Overseas fund managed in Hong Kongis set to grow further … partly thanks to QDII
0
200
400
600
800
2001 2002 2003 2004 2005 2006
Sourced from non-HK investorsSourced from HK
70% 63%63%
63%
63%
30% 37%37% 37% 37%
Source: SFC Fund Management Activities Survey 2006
USD bil
Increased by 280% in 5 years
Increased by 280% in 5 years
USD208 bn
USD582 bn
(+25%)
62%
38%
USD791 bn
(+36%)
USD210 bn
(+0%)
USD379 bn
(+80%)
USD465 bn
(+23%)
15
No. of listed companies (as of 31 Aug 2007)
Daily Average Turnover (HKD bil) (Jan – Aug 2007)
Total Mainland Enterprises
Market capitalisation (HKD bil) (as of 31 Aug 2007)
1,206
17,747
54
47
139
132
3,295
383
9,987
36
26
106
67
1,660
32%
56%
66%
55%
76%
50%
50%
No. of newly listed companies (Jan – Aug 2007)
Funds raised by IPO (HKD bil) (Jan – Aug 2007)
Funds raised in secondary market (HKD bil) (Jan – Aug 2007)
Total funds raised (HKD bil) (1993 – Aug 2007)
.. As well as new listings from the Mainland
Source: HKEx
16
Besides Mainland Chinese companies, we are also a platform open to foreign companies …
Note: Companies with foreign shareholders are defined as companies controlled as to 30% or more by an entity which is neither from Mainland China nor from HK
Companies With foreignshareholders
Japan
Korea Indonesia
Singapore
Malaysia
Thailand
Canada
Taiwan region
About 80 companies from 15+ locations
(excluding Mainland China and HK) with
foreign shareholders are listed in HK
Majority of them are from
Asian countries
About half of these companies have
significant operations in China
17
Some of which operate outside of Hong Kong and China
* Listed on GEM (Stock Code: 8260) in December 2003 at an offer price of USD 0.06 (HKD 0.45) per share and raised a sum of USD 13.8 mil at IPO. The company was transferred from GEM to Main Board on 1 March 2006.
Stock Code
Company NameMarket Cap. as of
18 Jul 2007 (USD mil)Place of Operation
678 Star Cruises Ltd. 3,048 N. America
276 Mongolia Energy Corporation Ltd. 2,509 Mongolia
3918 NagaCorp Ltd. 718 Cambodia
2317 Vedan International (Holdings) Ltd. 211 Vietnam
502 Pan Sino International Holdings Ltd.* 71 Indonesia
N. AmericaMongolia
Cambodia
Indonesia
Vietnam
Source: HKEx
18
A and H Shares : the dual listing model in HK
Source: HKEx and FTSE Xinhua Index
A shares • Renminbi denominated ordinary shares• Issued by companies incorporated in the PRC• Listed on Shanghai and Shenzhen Stock
Exchanges• Traded in Renminbi• Available only to local Mainland Chinese
investors and qualified foreign institutional Investors (QFII)
Shenzhen
Shanghai
19
A and H Shares : the dual listing model in HK (cont’d)
Source: HKEx and FTSE Xinhua Index
H shares • Renminbi denominated ordinary shares• Issued by companies incorporated in the PRC • Listed on the Stock Exchange of Hong Kong • Traded in Hong Kong dollars• First H-Share listed in July 1993
Shenzhen
ShanghaiWe are very experienced in
handling listings of companies from an emerging economy
20
Hang Seng Index past performance (Sept 06 – Aug 07)
Source: Bloomberg and HKEx
As of 30/06/2007,
- Hang Seng Index at a record high of 23,984.14 on 31 Aug, an increase of 38% yoy
21
Company
Market
Cap.
(US$ mil)
P/E
(times)
Total Fund Raised
(US$ mil)
Average daily turnover
YTM Aug 07
(US$ mil)
Listing Date
HSBC 211,026 13 21,039 367.5 N/A
Manulife 61,070* 18 13,189 3.0 Sep 99
ICBC 54,232 29 16,060 245.9 Oct 06
Standard Chartered 42,876 18 4,120 5.6 Oct 02
Bank of Communications 25,970 32 2,164 89.5 Jun 05
China Merchants Bank 10,025 55 2,660 88.5 Sep 06
China CITIC Bank 9,548 N/A 4,232 48.2 Apr 07
Fubon Bank 657 16 300 0.8 Nov 93
Listing statistics of some financial institutions in HK (31 Aug 2007)
Source: HKEx* Bloomberg as at 24 Sept 2007
22
Banks & Financial Institutions listed in Hong Kong: China CITIC Bank
Source: Bloomberg and HKEx
% Change since IPO: 2%
Market Cap.: USD 9,548 mil
Average Daily Turnover in 2007: USD 48.2 mil
Listing Date: 27 Apr 2007
IPO Fund raised: USD 4,232 mil
23Source: Bloomberg and HKEx
Banks & Financial Institutions listed in HK:(1) Industrial and Commercial Bank of China
% Change since IPO: 65%
Market Cap.: USD 54,232 mil
Average Daily Turnover in 2007: USD 246 mil
Listing Date: 27 Oct 2006
IPO Fund raised: USD 16,060 mil
24Source: Bloomberg and HKEx
Banks & Financial Institutions listed in HK:(2) Bank of China
% Change since IPO: 36%
Market Cap.: USD 39,183 mil
Average Daily Turnover in 2007: USD 187 mil
Listing Date: 1 Jun 2006
IPO Fund raised: USD 11,149 mil
25Source: Bloomberg and HKEx
Banks & Financial Institutions listed in HK(3) Bank of Communications
% Change since IPO: 250%
Market Cap.: USD 25,970 mil
Average Daily Turnover in 2007: USD 90 mil
Listing Date: 23 Jun 2005
IPO Fund raised: USD 2,164 mil
26Source: Bloomberg and HKEx
Banks & Financial Institutions listed in HK(4) China Life
% Change since IPO: 949%
Market Cap.: USD 36,010 mil
Average Daily Turnover in 2007: USD 407 mil
Listing Date: 18 Dec 2003
IPO Fund raised: USD 3,434 mil
27Source: Bloomberg and HKEx
Banks & Financial Institutions listed in HK(5) Ping An Insurance
% Change since IPO: 685%
Market Cap.: USD 26,672 mil
Average Daily Turnover in 2007: USD 90 mil
Listing Date: 24 Jun 2004
IPO Fund raised: USD 1,843 mil
28
Listing requirements
Main Board – 3 financial criteria1. Profit Test
Profits of 3 years ≥ USD6.4million (HKD50million)
2. Market Cap/Revenue Test(i) Market Cap ≥ USD513million (HKD4billion)
(ii) Revenue of the most recent audited year ≥ USD64million (HKD500million)
3. Market Cap/Revenue/Cash flow Test(i) Market Cap ≥ USD256million (HKD2billion)
(ii) Revenue of most recent audited financial year ≥ USD64million (HKD500million)
(iii) Aggregate positive cash flow for 3 preceding financial years
≥ USD13million (HKD100million)
GEM – No profit or other financial requirement
Fulfill any one test
29
Listing requirements (Cont’d)
Main Board – Operating History 3 years (may accept a shorter trading record period if qualify under
the Market Cap/Revenue test)
Management continuity
Ownership continuity and control for at least the most recent audited financial year
GEM – Operating History 2 years (maybe reduced to 1 year if certain requirements are met)
30
Listing process
An issuer decides to list
on HKEx
An issuer decides to list
on HKEx
Appointment of sponsors
& other professional
advisors
Appointment of sponsors
& other professional
advisors
Restructuring, preparation of Accountants’
Report, drafting ofprospectus
Restructuring, preparation of Accountants’
Report, drafting ofprospectus
Sponsor submits listing application &
related documentto the Listing
Division of HKEx
Sponsor submits listing application &
related documentto the Listing
Division of HKEx
Successful listing in
Hong Kong
Successful listing in
Hong Kong
Roadshow to promote to investors
before trading commences
Roadshow to promote to investors
before trading commences
Hearing by Listing
Committee
Hearing by Listing
Committee
Review of listing
application by the
Listing Division
Review of listing
application by the
Listing Division
Approval Recommendation
31
To facilitate listings of overseas companies in Hong Kong
- 7 Mar 2007SFC-HKEx Joint Press Release clarified the requirements of overseas issuers seeking a listing in applicants to comply with the shareholder protection requirements
- 2H 2007 Introduction of a Depositary Receipt regime under study
We are developing a Depositary Receipt program
32
HKEx Mission 2004-06
“To operate a world-class marketplace for Hong Kong and Mainland China securities and derivatives products.”
HKEx Mission 2007-09
“To be a leading international marketplace for securities and derivative products focused on
Hong Kong, Mainland China and the rest of Asia.”
The HKEx strategic plan 07-09
33
Contact
Business Development Division
Add: 10/F, One International Finance Centre
1 Harbour View Street, Central, Hong Kong
Tel: (852) 2840 3780
Fax: (852) 2530 2858
Email: [email protected]
HKEx website: www.hkex.com.hk