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Frankfurt bourse invites Chinese firms to list

By Jin Jing (China Daily)
Updated: 2007-04-14 06:53

SHANGHAI: Deutsche Borse Group, the world's fourth-largest stock exchange located in Frankfurt, is inviting Chinese firms to list.

However, many Chinese companies say they prefer to list locally because of higher profits, lower expenses, and a relatively simple and quick government approval process.

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Hundreds of delegates, including local government officials, company representatives and accounting experts, attended a meeting held by Deutsche Borse Group in Hangzhou on Friday.

"It is the first time we are promoting in China. We are targeting coastal cities, such as Wuxi, Hangzhou and Shanghai, where the economy is developing more quickly compared to other places in China," said Ruan Yuxing, senior accounting manager of Deutsche Borse Issuer Relations.

Today, only one Chinese firm has been listed on the Deutsche Borse.ShandongGongyou Group Co Ltd, the multi-purpose lathe producer, began trading on the Frankfurt exchange on March 30, this year.

"It is a good opportunity for Chinese companies to get acknowledged in the world through listing overseas. Besides, the cost for listing in Frankfurt is much lower than that of London," Ruan said.

According to statistics compiled by Deutsche Borse Group, listing for a company in Frankfurt is about 8.7 percent of its total capital raised, while in London, the percentage is 11.7 percent.

Many Chinese companies, however, prefer to list in China.

Zhou Yuliang, deputy general manager of theZhejiangYongda Group, said the company is now preparing for a listing on theShenzhen Stock Exchangenext year.

"We can raise more money in China than overseas because of the liquidity of China's stock markets," Zhou told China Daily.

A Zhejiang company executive, surnamed Liu, said the approval process time for an overseas listing was lengthy. Companies must first gain the approval of theChina Securities Regulatory Commission.

But compared with other world stock exchanges, some at the meeting, felt the Deutsche Borse has a more relaxed regulatory environment.

The Sarbanes-Oxley Act of the United States is widely regarded as an obstacle for Chinese companies to list there.

"The Act raises the cost of listing," Ruan said.

A total of 132 companies in Zhejiang Province have listed overseas, including 105 A-share and B-share companies, and eight H-share companies.

(China Daily 04/14/2007 page10)