Located in the centre of Asia and in close proximity to mainland China, the Hong Kong capital market has an ability to attract international companies that do business or wish to do business in China. More than just its proximity to the Chinese mainland, what makes Hong Kong special is its ability to efficiently accomplish and assist companies' short and long term goals.
For example, Hong Kong is a free market. It has no capital controls and has a favorable tax environment. It is a well-established market with strong fund-raising capabilities, reasonable valuations, strict listing & disclosure standards, and an advanced technology & infrastructure platform. Furthermore, Hong Kong also helps companies strengthen their brand and raise their visibility by bringing companies closer to Asia.
Other benefits of Hong Kong include: greater liquidity, more opportunities to raise follow-on funds, and an exposure to RMB products. Companies in consumer and luxury goods, mining & natural resources, and financial services can obtain a potentially higher valuation than what they would get in other markets.
In recent years, China has developed into a global financial powerhouse, and Hong Kong has been there to service the needs of China’s institutional and retail customers, alike.
Thus, by listing in Hong Kong, international companies can tap into the huge capital pool and diversified investor base in Asia, and particularly in China. Hong Kong already attracts many international companies looking to do business in China, yet, given the above advantages, we expect Hong Kong will continue to be a capital markets centerpiece for global companies looking to do business or IPO well into the future.