Overseas Listing of Chinese Companies

Abstract

With the rapid development of China’s economy, since the policy of reforming and opening-up was executed 20 years ago, China has become more involved in the global economy system. More and more Chinese companies started to enter the international stock markets for capital raising. Going public in the international stock exchanges is a good way for Chinese companies to get investments and capital to expand their business. Today, about 70 Chinese companies have been listed on Hong Kong Stock Exchange, New York Stock Exchange etc. Most companies selected Hong Kong as the main stock market for capital raising due to the advantages and easy operation in Hong Kong. Now, over 300 new Chinese domestic corporations have applied and are waiting for the permission to list on Hong Kong Stock Exchange. But the process to get the permission will last over one and half a years. This is too long for those companies that are in urgent need of international capital. Many companies started to pursue capital from other international markets. There are many other options for Chinese companies to issue shares. But, in this thesis, only listing on the London Stock Exchange is to be researched, mainly because London can be taken as the representative of European stock markets, and the writer of this thesis is going to do some research related to China and Europe purposely. This thesis provides the basic knowledge of London Stock Exchange, and describes the general matters related to listing on London Stock Exchange including listing requirements and procedures. Furthermore, it conducts an analysis of the possibility and feasibility of Chinese company’s listing in London, based on a integrated comparison to the listing on Hong Kong Stock Exchange. Its objective is to help Chinese companies get a better understanding of London Stock Exchange. The analysis of empirical findings shows that London is a suitable stock market for Chinese companies. London can also provide Chinese companies with an ideal opportunity for capital raising. This thesis is expected to be valuable for Chinese companies seeking overseas listing, and anyone who has interest in this subject.