Roundup: GEM Becomes Asia's Capital Formation CenterThe Growth Enterprise Market (GEM), the Hong Kong counterpart of Nasdaq, has emerged as the most successful capital formation center in the Asian region, with its total market capitalization jumping up to over US$7.4 billion in the six months since its launch last November.GEM has raised more funds than any other second boards in the region and attracted not only the home-grown companies but others in China's mainland, Taiwan and the ASEAN region, said K. S. Lo, chairman of the GEM Listing Committee when addressing the GEM Conference 2000 on Thursday. Statistics showed that GEM raised 1.01 billion U.S. dollars in three months up to the end of March this year, exceeding the accumulated total of its other five Asian counterparts, including KLSE 2nd Board, ROSE, SESDAQ, KOSDAQ and MOTHER. "This has reinforced the status of Hong Kong as a pre-eminent financial center in the region," Lo stressed. The exchange first published its listing rules in last July, and a total of 75 applications were received from domestic and foreign companies in the 6 months since its launch, with 26 already listed. So far, all the GEM companies have demonstrated a path to profitability with 10 out of 17 companies in recent financial reporting showing profit growth despite the recent market jitters about the New Economy stocks worldwide. "GEM is, of course, not immune from a much needed market correction for picking the real winners," Lo said, adding that the exchange will target growth companies, be this in the New, the Old Economy, or the combined "clicks and mortars." Participants to the conference predicted that capital, talents and management will be the major challenges faced by New Economy and technology start-ups. However, GEM provides a new window for capital raising and talents, they said. Thomas Tang, executive director of the Hong Kong Productivity Council and organizer of the conference, said that while Hong Kong has always had a large pool of venture capital, little of that has found its way into IT companies, and "the GEM obviously fills an urgent need." Speaking of the future challenges GEM faces, Lo said the exchange is a new market of emerging and more riskier nature and it needs an economy of scale to attract different market participants. The marketing development issues and regulatory requirements should be balanced and a strong analyst network to facilitate the growth of the New Economy should be built up, Lo noted. The conference with the theme of "A World of Opportunities for Professionals and Growth Enterprises" was held to update local companies on GEM's latest development. It was attended by more than 200 entrepreneurs, professionals and senior executives of growth enterprises. |
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