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Sunday 23 November 2008
In Upside to Crisis, IPO Drought Spares Forests
The deepening gloom gripping global stock markets does have at a bright side - fewer initial public offerings means fewer prospectuses are printed, sparing tens of thousands of trees.
The deepening gloom gripping global stock markets does have at a bright side - fewer initial public offerings means fewer prospectuses are printed, sparing tens of thousands of trees.
“Since July, there have hardly been any IPOs, maybe just one or two,” said James Wong, the CEO of Computershare Hong Kong Investor Services, a financial market services provider.
Mr. Wong said now was a good time to renew the push to turn back the sea of paper that floods every initial public offering, in favour of electronic documentation.
Last year alone, 10 million copies of prospectuses and annual reports were printed in Hong Kong, equivalent to nearly 140,000 trees, according to Computershare.
It was a strong year, with more than 80 companies going public in Hong Kong, a record that almost certainly will not be in reach this year - in the first 10 months there have been only 41 IPOs.
Despite the lull, companies are still printing stacks of annual reports, sending out dividend cheques and correspondence to their shareholders - amounting to 2.6 million copies last year, or 44,220 trees.
Mr. Wong said Hong Kong should follow the lead of the United States and Britain, which have gone much further with the use of electronic prospectuses and annual reports.
“With companies like HSBC, which is registered in the United Kingdom, printed copies are only sent upon the request by stockholders,” Mr. Wong said. “The end result is that only 5 per cent of stockholders request printed copies.”
In April, the stock exchange and the Securities and Futures Commission issued a joint proposal to allow paper application forms for public offerings which have electronic prospectuses available.
Mr. Wong said Computershare would donate HK$2 to a tree farm in Jiangxi province for each copy of an electronic announcement or annual report that is used by its clients as an alternative to the paper version.
Mr. Wong estimates that Computershare would lose less than 10 per cent of its revenue if Hong Kong required that all IPOs and annual reports be distributed only electronically.
However, some of that loss would be offset through new business stemming from its technology services for the securities industry.
In response to Mr. Wong’s comments, a spokeswoman for the Securities and Futures Commission said that electronic prospectuses were already allowed under present legislation.
However, correspondence, such as the announcement of appointments, had to be sent in printed form for the sake of investors’ interests, the spokeswoman added.
1 comment:
In Upside to Crisis, IPO Drought Spares Forests
Yau Chui-yan
23 November 2008
The deepening gloom gripping global stock markets does have at a bright side - fewer initial public offerings means fewer prospectuses are printed, sparing tens of thousands of trees.
“Since July, there have hardly been any IPOs, maybe just one or two,” said James Wong, the CEO of Computershare Hong Kong Investor Services, a financial market services provider.
Mr. Wong said now was a good time to renew the push to turn back the sea of paper that floods every initial public offering, in favour of electronic documentation.
Last year alone, 10 million copies of prospectuses and annual reports were printed in Hong Kong, equivalent to nearly 140,000 trees, according to Computershare.
It was a strong year, with more than 80 companies going public in Hong Kong, a record that almost certainly will not be in reach this year - in the first 10 months there have been only 41 IPOs.
Despite the lull, companies are still printing stacks of annual reports, sending out dividend cheques and correspondence to their shareholders - amounting to 2.6 million copies last year, or 44,220 trees.
Mr. Wong said Hong Kong should follow the lead of the United States and Britain, which have gone much further with the use of electronic prospectuses and annual reports.
“With companies like HSBC, which is registered in the United Kingdom, printed copies are only sent upon the request by stockholders,” Mr. Wong said. “The end result is that only 5 per cent of stockholders request printed copies.”
In April, the stock exchange and the Securities and Futures Commission issued a joint proposal to allow paper application forms for public offerings which have electronic prospectuses available.
Mr. Wong said Computershare would donate HK$2 to a tree farm in Jiangxi province for each copy of an electronic announcement or annual report that is used by its clients as an alternative to the paper version.
Mr. Wong estimates that Computershare would lose less than 10 per cent of its revenue if Hong Kong required that all IPOs and annual reports be distributed only electronically.
However, some of that loss would be offset through new business stemming from its technology services for the securities industry.
In response to Mr. Wong’s comments, a spokeswoman for the Securities and Futures Commission said that electronic prospectuses were already allowed under present legislation.
However, correspondence, such as the announcement of appointments, had to be sent in printed form for the sake of investors’ interests, the spokeswoman added.
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