"Asia Pacific Exchange targets China float demand" – The Australia (21/5/12)
By: Florence Chong - The Australian
George Wang says a lot more due diligence will be done on Chinese companies before listing.
Australia's newest bourse, the Asia Pacific Exchange (APX), is expected to go live late next month, providing an alternative platform for Australian and Asian companies seeking to go public.
The privately owned exchange, based in Sydney, is expected to list its first companies towards the end of the year.
"We are talking to five Australian companies with market capitalisation of about $100 million each about floating," said George Wang, chairman and chief executive of APX parent company, AIMS Financial Services Group.
The companies were in resources, property and services, said Mr Wang, whose group purchased APX three years ago.
Chinese companies had also expressed interest, he said, adding that, in time, he hoped trades in APX stocks could be made in the Australian dollar and China's yuan. A key part of Mr Wang's strategy is to tap into the growing pool of offshore yuan.
Mr Wang said Chinese companies approved for listing on the APX would differ from their predecessors, which listed but failed to take off on the ASX. A lot more due diligence would be done on Chinese companies before listing to ensure they were more successful than those listed on London or New York stock exchanges.
"The difference is we are familiar with the Chinese system and we are building a team in China who will do the initial vetting before they come before the APX listing committee," Mr Wang said.
He expected APX to have an advantage due to its business connections in China.
"APX has opened an office, the first Australian company to do so, in Shenzhen's new financial district at Qianhai," he said.
The exchange would provide a bridge for Australian companies reaching out to Asian investors, and vice versa for Asian firms.
There was a queue of Chinese companies seeking to list, he said. "In Shenzhen alone there are potentially 300,000 companies, of which at least 20,000 would qualify to list."
But, he said, the Shenzhen and Shanghai stock exchanges had long waiting lists of float hopefuls.
Companies making initial public offerings, he said, would have the opportunity to raise the capital in Australia and China.
APX has an agreement with China Development Bank Securities and is working with other Chinese groups on providing pre-listing documentation and finance to companies seeking to list.
"We see many wealthy Chinese individuals and groups who want to invest overseas. Australia is well positioned to capture some of this capital," Mr Wang said.
Aside from being the source of mining, resources, agriculture and high-technology, "Australia stands for transparency, governance and political stability".
"Many Chinese would see Australia as the gateway to the Western world," Mr Wang said.
APX was originally set up in 1997 as an "exempt market" which listed companies in the same way as the Sydney Futures Exchange. ASIC granted it a licence to operate as a stock exchange in 2004.
The Australian - Asia Pacific Exchange targets China float demand.pdf
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