Investing in growth now a piece of cake

Thanks to the easy and clear market access as well as an international investor base, the Hong Kong exchange should remain the major destination for large-cap US-listed Chinese firms' secondary listings, helping boost trading volume of the exchange and cement its position as an international financial center, experts said.

"The rules are clear and the execution process is efficient. The ecosystem of investors, research analysts and professional parties is well established," said David Chin, head of investment bank in Asia Pacific for UBS, the Swiss bank. Chin is also UBS China country head.

Mainland listing is also "an attractive option" partly as it would help raise Chinese companies' profile among their customers, Chin said.

For small-cap US-listed Chinese firms, a re-listing on the STAR Market or ChiNext board may be ideal, given the potential for higher valuation and better liquidity than in Hong Kong, said an Everbright Securities report.

The Singapore Exchange, or SGX, another international financial hub in Asia, is also trying to have returning Chinese companies list on it.

SGX features a deep base of global institutional investors, which makes it one of the wealth management centers in Asia, facilitating secondary listing and providing convenient refinancing channels. This makes it attractive for Chinese businesses seeking to expand their business into Southeast Asia, said Karen Chen, vice-chairman of SGX China, the bourse's local branch.

The exchange is confident of "achieving breakthroughs" in attracting Chinese listings in the new fiscal year starting July, Chen said.

Amid all these developments, experts still call for a proper resolution of the US-China auditing dispute. This, they said, will dispel uncertainty and costs facing both the Chinese firms concerned and their investors.

Some of them expect the auditing dispute to be resolved next year, provided the two countries demonstrate a willingness to solve the dispute proactively.

Last month, the China Securities Regulatory Commission, the country's top securities regulator, made a fresh proposal to resolve the dispute. The proposal would allow the US side to pick any of China's State-owned enterprises for a trial joint inspection, according to a Bloomberg report. The proposal has yet to receive positive replies from the US administration.

While many obstacles remain on the path to peaceful resolution, certain aspects like working papers and auditor responsibilities need to be sorted out quickly. However, the willingness to engage in creative thinking and discuss potential cooperation is encouraging, said Tang from Hogan Lovells.

"I am still hopeful that the two sides will reach a sensible and mutually acceptable arrangement next year," said Chin with UBS, adding he understands the CSRC had collaborated with its US counterpart on a number of cases in the transfer of relevant audit documents in the past.