An IPO Listing on the Hong Kong Stock Exchange is a very promising leverage for financially boosting large profitable firms. A recent example of such an application to list on the mainboard is LV Sands. On August 20th 2009 Howard Stutz wrote with regards to the listing application,
“Las Vegas Sands Corp. said it has formally applied with the Hong Kong Stock Exchange for a listing on the main board of the Asian stock market.”
It was suggested by JP Morgan gaming analyst Joe Greff that up to $2 billion for 30% equity in its Macau casinos could be raised, with lenders in the Macau loan covenants, the way for listing on the Hong Kong Stock Exchange is being paved.
Listing on the Hong Kong Stock Exchange allows for:
– Improved liquidity
– Increased financial flexibility due to lender comfort
– Access to immediate and forthcoming capital
– Completion of infrastructure projects in Asia due to local support and interests
– it’s Asia’s oldest and most prestigious stock exchange
Today with its total securities market capitalization of a record sum of HK$ 8,260.3 billion (US$ 1,063.9 trillion), the HKSE ranks 8th place by market capitalization in the world.
The Hong Kong Stock Exchange is an excellent choice for listing large scale local projects run by foreign companies such as LV Sands. The model is duplicatable for the large land developers and infrastructure projects, such as energy projects, that require significant capital outlay to be completed. The equity holders and subsequent debt holders gain the ease of being secured by equity and increases significantly the access to capital locally.
The trading system of the Exchange is an order-driven system. HKEx securities market operates on two trading platforms – the Main Board and the Growth Enterprise Market (GEM). Each trading platform has a different set of requirements. The Main Board is the market for capital growth by established companies that meet profit requirements. Meanwhile, the Growth Enterprise Market provides a fund raising venue for ‘high growth, high risk’ companies. It promotes the development of technology industries and venture capital investments.
More information on listing on the Hong Kong Stock Exchange at http://www.hkex.com.hk/issuer/listhk/listhk.htm