The London Stock Exchange announced yesterday that it will open a regional office as part of its strategy for attracting listings from China, which is one of the international exchange’s key target markets.
The new office, the Exchange’s first in Asia-Pacific, will establish a permanent presence in the region and act as a base for senior Exchange executives who visit the region regularly.
In the coming year, Exchange executives will be in China on a number of trips aimed at building relations within the principal economic and financial centres and raising the company’s profile. Among these trips:
* Chris Gibson-Smith, the Exchange’s Chairman, will be in China in April;
* Martin Graham, Director of Market Services and Head of AIM, will be at the seventh International High-tech Expo in Beijing in May;
* and Clara Furse, Chief Executive, will be in the region again for a week in September.
As part of this, the Exchange is building its ties with the Shanghai and Shenzhen exchanges, two increasingly important exchanges in the region. In January 2004, the Exchange signed Memoranda of Understanding with both exchanges. Initially, the office will be based in Hong Kong, which remains the Asian centre for international finance. This office will support the Exchange’s efforts to attract Asian companies to London’s international market.
In particular, the Exchange will be targeting the large privatisation deals and other medium to large enterprises in China. Since 2002, the medium to large enterprises, of which there are around 4 million, have accounted for over 50 per cent of Chinese GDP and have experienced a growth rate of between 20 and 50 per cent annually.
The Exchange will also continue to promote dual listings in London and Hong Kong through a single prospectus.
Commenting on the Exchange’s plans in the region, Clara Furse said: "As one of the largest and fastest growing economies in the world, China is a core market for the London Stock Exchange. By the same measure, as the world’s most international financial centre, London should be the natural home for dynamic, growing Chinese companies looking to attract international capital. London has more funds under management than New York and a much more pragmatic system of regulation under which international companies can list and raise money".