The latest development in the reform of China’s banks is the listing in Hong Kong of China Construction Bank, China’s third largest lender, in the world’s biggest IPO this year. Listings of the Bank of China and the Industrial & Commercial Bank of China are expected to follow. But China’s international IPOs are not limited to China’s banks, or to Hong Kong – Dealogic reports that five Chinese companies have raised US$645 million in the U.S. so far this year, and there are reports of a billion US dollar-plus Chinese IPO going to Nasdaq (possibly from the transport sector), as well as an upcoming US$600 m IPO in Hong Kong for Dongfeng Motor Corp.
The Financial Times has pointed to a trend for Chinese companies to avoid dual listings in New York, partly as a result of the Sarbanes-Oxley corporate governance rules that were introduced in the US in 2002, but also due to lower costs, and a less restrictive environment. Chinese companies now account for 32 percent of Hong Kong stock market capitalisation (it was 26.9 percent in 2000). Ernst & Young has predicted the figure will hit 50 percent within five years.
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