BEIJING, July 14 -- The strength of the Chinese mainland's emerging economy is leading to feverish trading across the globe, as investors hunt for opportunities to capitalize on mainland companies' growth.

　　A close look at the mainland's overseas initial public offerings (IPOs) over the past months reveals that competition for a slice of the mainland economy is intensifying among the world's stock exchanges.

　　It's a seller's market as the world's exchanges compete like never before.

　　London, the United States, Hong Kong, and Singapore are popular exchanges for mainland companies to go public on. To compete, they have learned to offer different solutions to meet the diverse needs of companies at different stages of growth.

　　London and Hong Kong

　　A new and interesting thing is the shift in capital raising for mainland companies between London and Hong Kong.

　　London Stock Exchange (LSE), one of the world's oldest bourses to attract large international IPOs, has turned out to have more competence in attracting small companies.

　　Meanwhile Hong Kong has grown from an insufficient liquidity market into a major global capital market, that staged all the biggest mainland IPOs of 2005, but at the price of losing small companies.

　　Hong Kong exchanges, with no doubt, notably gained in 2005. Statistics by leading accounting firm Ernst and Young show that out of the mainland's 114 IPO transactions that year, 64 deals were made in Hong Kong.

　　In total mainland companies raised 21.3 billion yuan (US$2.66 billion) of capital, accounting for 88 per cent of the total capital raised on exchanges.

　　All the top five IPOs of 2005 were from the mainland, with State-owned commercial banks leading the pack.

　　China Construction Bank and the Bank of Communications both went public in Hong Kong. They will be followed by the Industrial and Commercial Bank of China this year.

　　Their success in Hong Kong challenges the long-held assumption that companies above a certain size need to list in the United States or London in order to raise significant capital.

　　Increasingly, issuers are becoming comfortable with the idea that big deals can be done exclusively in Hong Kong without the need to list elsewhere.

　　"This signals a new era, not just for China but for global capital markets in general. It indicates a new liquidity in the markets and a shift in the IPO landscape," said KC Yau, a partner with Assurance and Advisory Services at Ernst & Young.

　　LSE, historically a top choice for companies to raise large amounts of capital when listing, seems to have no advantage over Hong Kong in luring large mainland IPOs.

　　However, LSE's second market, the Alternative Investment Market (AIM), was extremely successful at attracting smaller Chinese companies last year.

　　"Currently 28 Chinese companies (including Hong Kong companies) are listed on AIM. The first half of 2006 saw 12 Chinese companies list themselves there," Clara Furse, chief executive of LSE told China Daily.

　　By comparison, only nine small mainland companies are listed on Hong Kong's second market, the Growth Enterprise Market (GEM) in 2005. The number has fallen since 2003, when there were 27 mainland listings on GEM.

　　Singapore

　　As Hong Kong listings seem to be a natural stepping-stone for many mainland companies making their way onto the world stage, another good step for mainland companies becoming internationalized is Singapore.

　　Just like Hong Kong the Singapore Exchange (SGX) is prospering on the back of the mainland boom, thanks to cultural and language similarities.

　　"Singapore is the 'natural gateway' via which Chinese companies establish business relations with Southeast Asia and other regions," Singapore's Senior Minister Goh Chok Tong said.

　　The exchange is particularly distinctive for attracting manufacturing companies. Statistics from the exchange show that 40.1 per cent of listed companies on SGX are manufacturers.

　　Up till May 2006, 103 Chinese companies (including firms from the Hong Kong and Taiwan areas) were listed on the bourse, accounting for 14 per cent of the total number of companies listed on SGX, 68 per cent of the Chinese companies were manufacturers, according to Lawrence Wong, senior vice-president and head of listings with SGX.

　　Those companies choosing SGX have a clear motive to get on to the international market, especially in Southeast Asia.

　　Asianpharm Group Ltd is a medicine manufacturer with factories in Shandong Province. The company went public on SGX on May 5, 2004, believing Singapore was the ideal location for a big medicine manufacturer.

　　"We want to break into the Southeast Asia market, getting into Viet Nam, Indonesia and Thailand, by listing on the SGX," said company Chairman Liu Dianjun.

　　New York

　　Among global bourses, the United States was the only one that did not see rising numbers of Chinese IPOs in 2005.

　　For North America, which continues to account for almost one-fourth of global IPO activity, 2005 was a year of stability.

　　Both deal numbers 285 compared with 286 and capital raised US$39.4 billion compared with US$39.7 billion remained steady compared with 2004, according to a survey conducted by Ernst & Young.

　　Views are mixed as to whether the implementation of the Sarbanes-Oxley Act and the associated additional costs and compliance requirements of going public in the United States has affected IPO activity.

　　"The Sarbanes-Oxley legislation, which followed several high-profile corporate scandals, caused a major shift in the landscape, with repercussions all around the world." said KC Yau.

　　"As with all complex new legislation, time and effort is needed by both companies and advisers to fully digest and interpret its requirements. This may have contributed to a stagnant US IPO market," said Yau.

　　But the US market continues to welcome earlier stage growth opportunities, which is why those types of companies still found the US market attractive.

　　Among the 10 Chinese companies that went public in the United States last year, nine were listed on the NASDAQ.

　　A famous example is , a Beijing-based Chinese search engine which listed on the NASDAQ last year.

　　"Hong Kong is a good market, but more so for non-technology issuers," said Shawn Wang, Chief Finance Officer of . "There is no market that understands our business better than the United States. For a technology offering, the NASDAQ is the place to be," he said.

　　As global opportunities for financing ventures have increased significantly, so has the complexity of decisions facing companies planning an IPO.

　　The choice of which exchange to list on is key for companies, and not all markets are the same.

　　Exchanges vary in listing requirements, maintenance standards, rules and regulations, reporting and settlement. Companies need to choose stock markets that match their goals in going public.

　　(Source: China Daily)