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"China Concept" Still Hot in Stock Market This Year
The successful list of TravelSky Technology in Hong Kong February 7 marked the prelude to this year's H share capital raising, which, having witnessed its heyday last year would see another boom after the turn of the year.
Following China Telecom, a batch of enterprises such as China Unicom, CNPC and Sinopec also finished their overseas listing last year, which has further consolidated "China Concept" shares. Statistics said the fund raising for H share and red-chip stocks hit a record high of 343bn Hong Kong dollars in 2000, with Unicom breaking the biggest funding record of a single company to hit 44bn Hong Kong dollars.
The boom of China Concept, starting from last year, will be sure to continue in 2001, in which many enterprises, including CNOOC, are to get listed in Hong Kong and the expected volume of fund-raising, including the newly raised funds and that of the rationed projects, is to reach a total of US$18 billion,.
Market structure of H share and red-chips has been under readjustment since last year. There has emerged a cluster of enterprises that are quite competitive in the world in so far as the expansion of their individual business scale and H share reshaping as a whole is concerned. Instead of trading in traditional raw materials or engaging in public undertakings, a batch of enterprises of large scale and good performance started to take shape and lead the way in the fields of telecommunications and new economic sectors. Though this may exert pressure on capital diverting of the secondary market, however, in a long-term point of view, listing of high-quality enterprises will certainly help consolidate China Concept on Hong Kong market and attract more foreign investors.
In the meanwhile, the additional issue of H shares, following last year's B share, will also witness an upsurge in inland markets. After Nanjing-Shanghai Expressway and Guangzhou Pharmaceutical finished their additional issuance of A shares Tsingtao Brewery followed up to join in. Signs indicate that the markets both at home and overseas have provided large-sized state enterprises with a valuable capital source to cater to their different demands and on different stages of development.
HK Stock Exchange says to support inland enterprises to get listed in Hong Kong, they will introduce more financial products, including free index futures in the coming two or three months. This, in a sense, is an indication of China Concept to develop in a deep-going way in markets. Many major banks in Europe and the US are optimistic about China Concept and this practically guaranteed the boom of H shares and red-chips. Supported by China's steadily growing economy and its impending WTO membership, the sales for China Concept may enter a consolidated and stable stage.
By PD Online Staff Li Heng
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