Hong Kong Pauses for Breath After TOM.COM Frenzy

Hong Kong investors were warned Thursday against blindly rushing into Asia's Internet boom after "abnormal" scenes in which thousands of frantic buyers clamoured for a slice of a technology share issue.

The warning from legislators and analysts came after chaos at bank branches Wednesday when up to 400,000 would-be investors jostled to submit applications for shares in tycoon Li Ka-shing's Internet offer, TOM.COM.

The demand is expected to smash all records for a public share offering in Hong Kong and has not been seen since the frenzy for "red chip" China stocks in 1997.

But far from celebrating, Hong Kong authorities on Thursday reacted with alarm and disappointment.

"Maintaining a fair and orderly subscription process is the responsibility of the sponsor, the receiving bank and the company concerned," market watchdog the Securities and Futures Commission said in a statement.

"Ultimately, the development of a financial infrastructure for electronic subscription at IPOs will be speeded up. This would obviate the need to queue up for forms and to hand in the forms," it said.

Hundreds of police were called out to control the crowds Wednesday. Queues stretched for city blocks, disrupting traffic and business.

TOM.COM plans to use the money raised from the issue + only a fraction of which was made available to the public + to expand its new China Internet portal offering Chinese language information and entertainment.

Issued at 1.78 Hong Kong dollars (about 25 US cents) each, the shares are due to debut on the sharemarket on March 1 and already have a grey market price rumoured to range between 7.00-30.00 dollars.

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