SECONDARY LISTINGS - EXPAND INTO GLOBAL MARKETS

Written on the 1 December 2014 by Glenn Vassallo and Katie Johnston

SECONDARY LISTINGS - EXPAND INTO GLOBAL MARKETS

SECONDARY listings can provide companies with innovative and progressive ways to raise capital. 

The Hong Kong Stock Exchange (HKEx) is a logical and synergistic option for Australian companies looking to expand into secondary markets and tap into a new network of funds.  

The HKEx appeals to domestic companies for numerous reasons, including its analogous time zone to Australia and close trading and business links to other high growth Asian economies.

In Q4 2014, the HKEx experienced a 57.1 per cent increase in the number of newly listed companies. 

As at the end of October 2014, the total market capitalisation of listed securities on the HKEx (Main Board and GEM) was HK$25.3 billion (approximately AUD$3.75 billion). 

HKEx prides itself on having ‘zero capital flow restrictions, numerous tax advantages, currency convertibility and free transferability of securities’. 

Importantly, companies expanding to a secondary listing in Hong Kong enjoy a broader investor base which can translate to increased liquidity and improved access to capital. 

Another advantage from the company’s perspective is an increased profile and global presence, which can be valuable when expanding brands or operations into other markets or overseas. 

From a shareholder’s perspective, a secondary listing may also offer diversification of their investment and potentially lower investment risk as the shares are exposed to two or more markets rather than just one.

These benefits are particularly attractive when considered against the current Australian market.  

In the mining and resource sector alone, Australian companies are feeling the pinch of a shifting economic climate.  

According to the recent Grant Thornton Junior Mining and Exploration Report (JUMEX), almost 60 per cent of JUMEX respondents experienced working capital constraints during FY14, leading to project delays and limits on exploration activities.  

To avoid this trend continuing, we recommend mining companies consider whether a secondary listing (also termed a ‘cross listing’) may assist their growth and performance in 2015.

Companies with supply agreements with Chinese customers/end-users or Asian operations should consider the HKEx because of the depth of funds in the large Asian markets, relatively high price-to-earnings ratios and strong liquidity.

GRT Lawyers has recently advised a number of its clients on the secondary listing process, with a view of capitalising on these opportunities.  

While there are many obvious benefits, the secondary listing process requires expert legal guidance from advisers who also understand your business’ commercial objectives.   

Should you require more information or advice regarding secondary listings in Hong Kong, GRT Lawyers has an experienced and specialised team to lead you through the process.


Author: Glenn Vassallo and Katie Johnston
About: Glenn Vassallo is a managing partner and Katie Johnston is a senior associate at GRT Lawyers.

Latest News

THE STAR'S STUNNING ANSWER TO CROWN'S BARANGAROO

THE Star Entertainment Group (ASX:SGR), not to be outdone by James Packer's Barangaroo development across the ...

BRISBANE COAL TERMINAL REOPENS AFTER SHIPLOADER REPAIR

COAL loading has recommenced at New Hope's (ASX: NHC) Brisbane terminal today after repairs to its ship loader, w...

SUPERYACHTS OFFER UNTAPPED POTENTIAL AT COMMONWEALTH GAMES

SUPERYACHT Australia has devised a strategy to attract more superyachts to Queensland and capitalise on revenue op...

GDP FIGURES A 'WAKEUP CALL' FOR PARLIAMENT

THE GDP figures are an end-of-year wakeup call for Parliament about what lies ahead for the country, according to ...

Related News

HOW MCDONALD'S AUSTRALIA REDISCOVERED ITS INNOVATIVE SPIRIT

MCDONALD'S is such a ubiquitous part of the Australian landscape today that it is easy to forget how it change...

JB HI-FI IS THE GOOD GUY IN $870 MILLION ACQUISITION

ELECTRONICS giant JB Hi-Fi has formally completed its $870 million acquisition of home appliance chain The Good Gu...

ACCC ACTS AGAINST MERITON'S RIGGED REVIEWS

MERITON Property Services is under fire from Australia's main consumer watchdog, after it allegedly engaged in mi...

ACCC FIRES WARNING SHOT TO IVF PROVIDERS

IVF clinics have been put on notice by consumer watchdog, the Australian Competition and Consumer Commission (ACCC...

Contact us

Email News Update Sign Up Contact Details

Subscribe to our mailing list

* indicates required
Email Format

PO Box 2087
Brisbane QLD 4001

LoginTell a FriendSign Up to Newsletter