Firms look to German IPOs

08:49, September 30, 2010      

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Chinese companies have been vigorously pouring into Deutsche Borse AG, the Germany-based global leading exchange organization, amid the recovery of capital markets worldwide.

There are now 24 companies from China that have made an initial public offering (IPO) in Deutsche Borse. Seven of them were listed there this year, forming 30 percent of the total number, Alexander Hoptner, head of Markets Services in Deutsche Borse, said on Tuesday, Shanghai Securities News reported.

The stock exchanges of the Chinese listed companies have been vigorous in the German organization since the beginning of this year, Hoptner said.

"Five more Chinese firms are planning to list in Deutsche Borse-owned Frankfurt Stock Exchange by the end of 2010," he said. The seven newly listed Chinese firms are from Shandong, Guangdong and Fujian provinces, as well as Hong Kong. They include businesses dealing with green energy, high-tech engineering and manufacturing, healthcare, real estate and consumption goods production.

One of China's famous sanitary ware producers, Joyou AG, also started to list in the prime standard of the Frankfurt Stock Exchange on March 30, becoming the first Chinese sanitary ware company to list in Europe.

Joyou can take advantage of Germany's advanced technology and human resource in the sanitary ware industry to improve its competence as well as brand image, Cai Jilin, president of Joyou, told a German newspaper in August.

"It will be easier to connect with our European clients and partners after financing in Germany, one of the world's most significant financial centers," he was quoted as saying.

Clothing company King Hero Group from Xiamen, Fujian province, issued 8.75 million new shares at a share price of 15 euros ($20.37) in the German stock market on Aug 3. Compared with the alternative investment market of the London Stock Exchange and Hong Kong Stock Exchange, Deutsche Borse requires a relatively lower charge for issuing new stocks, said Zhao Xiaoping, investment relationship manager of King Hero.

Most Deutsche Borse's profit is from charges of stocks buying and selling services, instead of fees from issuing shares, Hoptner said.

"We will provide customized services to Chinese firms listed overseas. Moreover, Deutsche Borse can help them improve share liquidity and brand value through promotion projects in the next a few months," he was quoted by Shanghai Securities News as saying.

After being hit by the gloomy international investment market during the financial crisis, recovering overseas capital markets are becoming more attractive for Chinese companies.

There will be fast growth in Chinese firms listing abroad, Zhang Ning, the representative of the London Stock Exchange in Beijing, told China Daily.

Compared with the United States, European stock markets are becoming more popular with Chinese firms, Zhang said. "Increasingly, more large Chinese companies will aim for the main board of the European stock exchanges, with the recovery of investors' confidence."

Source: China Daily


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