New H.K. stockmarket chief promises to build trust
Hong Kong's new stock exchange chief vowed Tuesday to provide an "orderly and fair" trading platform, amid concern about low quality listings in the world's biggest IPO market. Chow Chung-kong, the former head of the southern Chinese city's rail operator, said the bourse was an "integral part" of the Asian banking centre's financial system with responsibilities that went beyond its shareholders. "We have a commercial role as a public listed company," he told reporters after being appointed chairman by the 13-member board of Hong Kong Exchanges and Clearing, the exchange operator. "On the other hand, we also have public responsibility to ensure an orderly and fair trading platform for Hong Kong," said the 61-year-old replacement for Ronald Arculli, who retired after six years in the position. Chow's comment comes after the city's securities regulator revoked the licence of local brokerage Mega Capital (Asia) and fined it a record HK$42 million ($5.4 million) over a troubled 2009 initial public offering (IPO). Mega Capital is a unit of Taiwan financial conglomerate Mega Financial Holding Co. The brokerage was punished by the Securities and Futures Commission on Sunday for inadequate and substandard due diligence work when advising Chinese clothing maker Hontex International Holdings' share sale in 2009. The Chinese firm was suspended from trading after just 64 days for allegedly releasing misleading information in its prospectus. The matter remains before Hong Kong's High Court. "We are obviously very seriously concerned about the recent companies issues," stock exchange chief executive Charles Li said. "It is the top priority of the exchange to make sure the quality of the companies that have been approved for listing are of the quality that our investors deserve." Hong Kong retained its crown as the world's biggest initial public offering market for the third year in a row in 2011, thanks to a slew of companies that turned to the city in a bid to tap mainland China's explosive growth. The city raised a total of $260 billion from new listings last year, which include several blockbuster share sales such as Italian luxury fashion house Prada and Swiss commodities giant Glencore. But some analysts are reportedly worried that the market's rapid growth may lead to lower standards.
