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Saturday, 3 October 2009
Firms list abroad to quench thirst for China stocks
A small mainland-focused firm floated shares in Germany yesterday and another filed for a listing in the United States as they sought to cash in on international investors’ appetite for a link to China’s economic growth.
Firms list abroad to quench thirst for China stocks
Nick Westra 02 October 2009
A small mainland-focused firm floated shares in Germany yesterday and another filed for a listing in the United States as they sought to cash in on international investors’ appetite for a link to China’s economic growth.
Wireless data card supplier Vtion Wireless Technology, which is based in Germany but does business on the mainland, kicked off trading yesterday on the Frankfurt Stock Exchange after raising nearly €56 million (HK$632.06 million).
Meanwhile, China Real Estate Information Corp, which provides a database of property information, filed for a listing in the US that could raise as much as US$200 million.
“They prefer to list in the US and Germany because they can have a higher valuation there,” said Ricky Tam Siu-hing, a director at Champlus Asset Management. “Also, we already have a lot of red chips and H shares in Hong Kong, so they would face more competition here.”
Overseas investors have been willing to pay a premium for the growth potential offered by most mainland-related stocks after Beijing jump-started the economy earlier this year by pumping billions of yuan into domestic initiatives. Vtion and China Real Estate are just the latest companies to take advantage of this.
Shanghai-based Shanda Games launched a listing in New York last week that raised US$1 billion, more than any other US listings so far this year. The online games provider slumped 14 per cent in its trading debut, however, after investors complained that the offering price was set too high. It rallied 8.84 per cent to US$11.70 on Wednesday following a three-session winning streak.
While demand existed for mainland companies to sell shares overseas, smaller ones must still consider the costs of maintaining a listing, particularly if it was their second one, said Ben Kwong Man-bun, the chief operating officer at KGI Asia.
“But the companies won’t mind having more sources of investors,” said Kwong. “It helps increase the reputation of the company and lets more people know more about it.”
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Firms list abroad to quench thirst for China stocks
Nick Westra
02 October 2009
A small mainland-focused firm floated shares in Germany yesterday and another filed for a listing in the United States as they sought to cash in on international investors’ appetite for a link to China’s economic growth.
Wireless data card supplier Vtion Wireless Technology, which is based in Germany but does business on the mainland, kicked off trading yesterday on the Frankfurt Stock Exchange after raising nearly €56 million (HK$632.06 million).
Meanwhile, China Real Estate Information Corp, which provides a database of property information, filed for a listing in the US that could raise as much as US$200 million.
“They prefer to list in the US and Germany because they can have a higher valuation there,” said Ricky Tam Siu-hing, a director at Champlus Asset Management. “Also, we already have a lot of red chips and H shares in Hong Kong, so they would face more competition here.”
Overseas investors have been willing to pay a premium for the growth potential offered by most mainland-related stocks after Beijing jump-started the economy earlier this year by pumping billions of yuan into domestic initiatives. Vtion and China Real Estate are just the latest companies to take advantage of this.
Shanghai-based Shanda Games launched a listing in New York last week that raised US$1 billion, more than any other US listings so far this year. The online games provider slumped 14 per cent in its trading debut, however, after investors complained that the offering price was set too high. It rallied 8.84 per cent to US$11.70 on Wednesday following a three-session winning streak.
While demand existed for mainland companies to sell shares overseas, smaller ones must still consider the costs of maintaining a listing, particularly if it was their second one, said Ben Kwong Man-bun, the chief operating officer at KGI Asia.
“But the companies won’t mind having more sources of investors,” said Kwong. “It helps increase the reputation of the company and lets more people know more about it.”
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