...Journal of Banking & Finance 37 (2013) 1460–1474 Contents lists available at SciVerse ScienceDirect Journal of Banking & Finance journal homepage: www.elsevier.com/locate/jbf Overseas listing as a policy tool: Evidence from China’s H-shares Qian Sun a,⇑, Wilson H.S. Tong b, Yujun Wu c a Department of Finance, School of Management, Fudan University, Shanghai 200433, China School of Accounting and Finance, Faculty of Business and Information Systems, Hong Kong Polytechnic University, Hung Hom, Kowloon, Hong Kong Special Administrative Region c Wealth Management Institute of Lujiazui, Shanghai 200122, China b a r t i c l e i n f o a b s t r a c t We investigate why the Chinese government chooses to perform share issue privatization (SIP) of its state-owned enterprises (SOEs) in Hong Kong, despite the benefit of facilitating the domestic stock market development if performing SIP in China (Subrahmanyam and Titman, 1999) and the higher cost to list in Hong Kong. We address this issue by arguing that the positive effect of SIPs on the development of the domestic market may have limitations, especially when the domestic market is not well developed and cannot absorb rapid and large-scale SIP activities. To maintain domestic market order, it may be optimal to carry out SIP in overseas markets. Furthermore, by listing shares in developed overseas markets, SOEs from the less developed countries could leverage on the overseas markets’ better accounting, governance...
Words: 18188 - Pages: 73
...Securitising China real estate: a tale of two China-centric REITs Michael C.H. Quek and Seow Eng Ong Department of Real Estate, National University of Singapore, Singapore Abstract Purpose – There is currently no real estate investment trust (REIT) listed in China. As of date, only two REITs – GZI REIT of Hong Kong and CapitaRetail China Trust (CRCT) of Singapore – have securitised Chinese property assets. The purpose of this paper is to examine the driving forces and the obstacles surrounding China REITs, and evaluate REIT securitisation as an exit strategy for Chinese properties. Design/methodology/approach – The paper analyses the performance of the two cross-border REITs and investigates whether REITs holding Chinese assets outperform other listed REITs. Research limitations/implications – CRCT outperforms GZI REIT as well as some of the other Singapore REITs, while GZI REIT ranked second lowest in terms of price performance when compared to other Hong Kong REITs. The limited history of CRCT suggests that when a well-structured REIT holding Chinese assets can perform very well. We also infer that performance is closely linked to portfolio composition and diversification, growth story and originator reputation. Originality/value – The study shows that there is indeed a strong local demand for China REITs, and that REITs can provide an alternative source of real estate financing for Chinese developers and promote a better regulated Chinese real estate market. Keywords Real...
Words: 9420 - Pages: 38
...July 3rd, 2009 The institutional development of Chinese capital markets has lagged – while a growing body of academic literature has demonstrated the positive linkages between the development of capital markets and economic growth, China has managed to grow at a breath-taking 10% CAGR over the last 30 years despite lacking commensurately developed capital markets. Several announcements in the past months suggest a potential shift – China may be finally paving the way to modernize and open up its capital markets, a process that has been long in the making. This time however, a date has been set with the announced objective of turning Shanghai into a global financial hub by 2020. In order to achieve that goal, several seminal changes will need to take place. Foremost among these will be convertibility of the Rmb and opening up of equity capital markets to foreign investors beyond the tightly controlled QFII program in existence. A set of domestic-oriented reforms, including a broadening of financial service offerings, will also be critical to the transformation. While the US-borne financial crisis has triggered much soul-searching in developed economies and a vigorous debate on reforms of financial institutions, it has had none of that effect in China. If anything, it appears to have accelerated plans to reform Chinese capital markets. At a high level, this can be seen as part of a broader effort to assert China’s naturally evolving role as a major economic power. Closer inspection...
Words: 1731 - Pages: 7
...Question A: The IPO process is characterized by information asymmetries. Explain these asymmetries may be reduced through the book-building process. According to Sherman (2002), the IPO process is characterized by the information asymmetries as there are two types of information asymmetries existing among the IPO issuer and the investors. First, the issuing firms are well aware about the conditions and situations of their own business as compared to the investors. Second, the investors are well aware about the firm’s outside factors as compared to the issuer. Sherman (2002) noted that the IPO process provides more information to certain investors and provides less information to the other investors. The initial public offering prospectus focuses on past information and performance where as the market price offerings on ballpark figure concerning the future performance. The investors such as the institutional investors get estimates and information from certain analysis such as the Wall Street Analysis where as the retail investors get no estimates and information. According to Sherman (2002), these information asymmetries may be reduced through the book building process. The book building process consists of three steps. In the first step, the investment bank chooses the investors who will be encouraged to evaluate the issue and possibly they purchase the issue. In the second step, the investors evaluate the issue and inform the investment bank about their demand for the...
Words: 2090 - Pages: 9
...Retailing (Uniqlo) • Zara’s global store and online expansion • Questions Zara Case Study 2 Corporate history (1 of 2) • 1963: establishment of clothing production company in A Coruῆa, Spain • 1975: first Zara store opens in A Coruῆa • 1985: Inditex Group is established • 1989: first international Zara store opens in Portugal Zara Case Study 3 Corporate history (2 of 2) • 1990s: acquisition of brands Massimo Dutti and Stradivarius • 2001: Inditex IPO • 2006: first Zara store opens in China • 2010: first Zara store opens in India • 2010: Zara launches first online store Zara Case Study 4 Inditex’s performance indicators, 2012 • Net income totalled 2.3 billion euros, an increase of 22% from 2011 • 6,009 stores, 482 more than a year earlier • Online store network covers 23 markets, with new launches in China and Canada • Creation of 10,802 new jobs in 2012, bringing workforce to 120,314 employees Zara Case Study 5 Inditex Group Brand Portfolio (1 of 8) Zara • Fashionable, yet affordable clothes for a wide range of people, cultures and generations, who, despite their differences, all share a special fondness for fashion • 1751 stores in 86 countries • www.zara.com Zara Case Study 6 Inditex Group Brand Portfolio (2 of 8) Pull & Bear • Casual, laid-back fashion for the global youth • 816 stores in 59 countries • www.pullbear.com Zara Case Study 7 Inditex Group Brand Portfolio (3 of 8) Massimo Dutti • Contemporary style, next-generation...
Words: 967 - Pages: 4
...ARTICLE IN PRESS Journal of Financial Economics 84 (2007) 330–357 www.elsevier.com/locate/jfec Politically connected CEOs, corporate governance, and Post-IPO performance of China’s newly partially privatized firms$ Joseph P.H. Fana,Ã, T.J. Wonga, Tianyu Zhangb a The Chinese University of Hong Kong, Shatin, N.T., Hong Kong b City University of Hong Kong, Kowloon, Hong Kong Received 19 August 2005; received in revised form 31 January 2006; accepted 6 March 2006 Available online 24 January 2007 Abstract Almost 27% of the CEOs in a sample of 790 newly partially privatized firms in China are former or current government bureaucrats. Firms with politically connected CEOs underperform those without politically connected CEOs by almost 18% based on three-year post-IPO stock returns and have poorer three-year post-IPO earnings growth, sales growth, and change in returns on sales. The negative effect of the CEO’s political ties also show up in the first-day stock return. Finally, firms led by politically connected CEOs are more likely to appoint other bureaucrats to the board of directors rather than directors with relevant professional backgrounds. r 2007 Elsevier B.V. All rights reserved. JEL classification: G34; L33; P31 Keywords: Political connections; Corporate governance; IPO performance; Partial privatization; China We appreciate helpful comments from Stijn Claessens, Mara Faccio, Simon Johnson, Florencio Lopez-deSilanes, John McConnell, Randall Morck, Harold Mulherin...
Words: 14040 - Pages: 57
...International Marketing plan on FlipKart Service Student ID: 350 2015 DEEPAK, STUDENT ID: 350 FlipKart Manager 7/16/2015 FlipKart Service Submitted to Udara Wickramasinghe Submitted by Deepak Kumar Sreeramula (Student ID: 350) ICNZ 2015 Executive Summary China's spectacular economic growth-averaging 8% or more annually over the past two decades-has produced an impressive increase in the standard of living for hundreds of millions of Chinese citizens. At the same time, this economic development has had severe ramifications for the natural environment. There has been a dramatic increase in the demand for natural resources of all kinds, including water, land and energy. Forest resources have been depleted, triggering a RANGE of devastating secondary impacts such as desertification, flooding and species loss. Moreover, poorly regulated industrial and household emissions and waste have caused levels of water and air pollution to skyrocket. China's development and environment practices have also made the country one of the world's leading contributors to regional and global environmental PROBLEMS, including acid rain, ozone depletion, global climate change, and biodiversity loss. Without greater attention and commitment from the centre, China's environment is likely to CONTINUE to deteriorate throughout much of the country, causing further...
Words: 6262 - Pages: 26
...“2006 Asian Banks Competitiveness Ranking” Report At the Request of “21st Century Business Herald” Jointly conducted by Faculty of Business Administration, The Chinese University of Hong Kong Guanghua School of Management, Peking University Written by: HE Jia, Hugh THOMAS Researchers: HE Jia, Hugh THOMAS, ZHOU Chunsheng Research Assistants: WAN Yanyan, SU Jun, MAO Tianshi Part One: Background for Asian Banks’ Competitiveness Study I. Asian Banking Reform Reform has surged across the banking industry in Asia over the last decade. In the large, insular, developing economies of China and India, the reform movement originated with internationalizing and introducing market mechanisms to stimulate previously state-owned systems. In Japan and the other traditionally market oriented Asian economies, the reform was born out of crisis. Japan’s slow and painful, a decade-long recession of the 1990s, following the bursting of the bank-financed real estate and stock markets bubbles, finally led to a consensus on the need for reform. But real urgency did not enter banking reform in Asia until the Asian Financial Crisis struck the smaller, developing, market-based economies of Asia in 1997. In the run-up to the crisis, capital inflows helped fuel debt-financed investment, while stable exchange rates and surging economic growth masked the risks of many loans to leveraged and risky companies, often based more on connections than sound credit analysis. Many...
Words: 21299 - Pages: 86
...CASE: A-197 DATE: 02/05/09 BAIDU.COM, INC.: VALUATION AT IPO Since its official launch in January 2000, Baidu.com, Inc. (Baidu) quickly grew to become the leading Internet search engine in China. After three rounds of private funding, Baidu registered to go public on the NASDAQ Stock Market (Ticker Symbol: BIDU) on August 5, 2005. (See Exhibits 1 and 2 for a listing of Baidu’s private funding sources and pre-IPO share allocations.) The initial public offering (IPO) turned out to be one of the highest-profile debuts since the Internet bubble burst in 2000. The stock price jumped 354 percent on the first day of trading and closed at $122.54, valuing the company at about $3.96 billion based on 32.3 million shares outstanding. While the market showed strong enthusiasm for the stock, Baidu’s public offering nevertheless generated much debate in the investment community about the underlying value of the firm. Furthermore, concerns were raised about whether or not Baidu was able to sustain its growth rate and exceed investor expectations after the IPO. Factors leading to this uncertainty included: the state of the Internet-paid search market in China, the expected growth in the marketplace, the competitive landscape, and the strength of Baidu’s business model and strategic position. BACKGROUND ON CHINA’S ADVERTISING AND ONLINE ADVERTISING MARKETS Advertising Market From 1995 to 2005 China’s advertising market grew at a compounded annual growth rate (CAGR) of 17 percent, which was...
Words: 10962 - Pages: 44
...-2- BRI-1004 the brutal suppression of demonstrators in China in June 1989. The same search on Google.cn provided a much smaller list and included pictures of a smiling couple in the square.2 The decision to develop Google.cn was complicated. In the words of Elliot Schrage, Google’s vice president of Global Communications and Public Affairs: [Google, Inc., faced a choice to] compromise our mission by failing to serve our users in China or compromise our mission by entering China and complying with Chinese laws that require us to censor search results.… Based on what we know today and what we see in China, we believe our decision to launch the Google.cn service in addition to our Google.com service is a reasonable one, better for Chinese users and better for Google.… Self-censorship, like that which we are now required to perform in China, is something that conflicts deeply with our core principles.… This was not something we did enthusiastically or something that we’re proud of at all.3 MacLean knew that he was perfectly prepared for his current position as director of International Business. After earning a computer-science degree, MacLean had traveled extensively, implementing information systems with an IT consulting firm. He was well-versed in the technical and cultural components of this current project. It was his first job after earning an MBA. He had worked very hard as a summer intern to get his foot in the door at Google, Inc., and landed a job offer in his second...
Words: 7187 - Pages: 29
...Chapter 2 REVIEW OF RELATED LITERATURE AND STUDIES This chapter presents the related studies and literature both local and foreign that serves as guide in the development of the proposed study. Foreign Literature India’s higher education system is the third largest in the world, after China and United State. The main governing body at tertiary level is the University Grants Commission. Which enforces its standards, advises the government, and help coordinate between the center and the state? Accreditation for higher learning is overseen by 12 autonomous institutions established by the University Grants Commission. As of 2009, India has 2 central university 215 state universities, 100 deemed universities, 5 institutions established and functioning under the state act, and 13 institutes which are of national importance. Other institutions include 16000 colleges, including 1800 exclusive women’s colleges, functioning under these universities and institutions. A software development and IT service firm implemented its catalyst in Governor Andres Pascual College was integrated web platform to provide content management, transaction processing, marketing and interactive community functions to the two rice schools. Catalyst delivers on the Jones Schools two primary criteria for selecting web-based platform simplifying content management, and enabling user’s response to information such as event RSVP and course registration. The content management tools let the Jones...
Words: 631 - Pages: 3
...CASE: A-197 DATE: 02/05/09 BAIDU.COM, INC.: VALUATION AT IPO Since its official launch in January 2000, Baidu.com, Inc. (Baidu) quickly grew to become the leading Internet search engine in China. After three rounds of private funding, Baidu registered to go public on the NASDAQ Stock Market (Ticker Symbol: BIDU) on August 5, 2005. (See Exhibits 1 and 2 for a listing of Baidu’s private funding sources and pre-IPO share allocations.) The initial public offering (IPO) turned out to be one of the highest-profile debuts since the Internet bubble burst in 2000. The stock price jumped 354 percent on the first day of trading and closed at $122.54, valuing the company at about $3.96 billion based on 32.3 million shares outstanding. While the market showed strong enthusiasm for the stock, Baidu’s public offering nevertheless generated much debate in the investment community about the underlying value of the firm. Furthermore, concerns were raised about whether or not Baidu was able to sustain its growth rate and exceed investor expectations after the IPO. Factors leading to this uncertainty included: the state of the Internet-paid search market in China, the expected growth in the marketplace, the competitive landscape, and the strength of Baidu’s business model and strategic position. BACKGROUND ON CHINA’S ADVERTISING AND ONLINE ADVERTISING MARKETS Advertising Market From 1995 to 2005 China’s advertising market grew at a compounded annual growth rate (CAGR) of 17...
Words: 11662 - Pages: 47
...Business Ethics and Global Dimension of Business Ethical issues have been around for a long time and its association with globalization has been documented. The effects on the association with globalization are similar and closely related to that of international marketing. As a result, the increased globalization over the years has brought an increase in many problems associated with global trading including ethical ones. (WTO, 2011). As indicated by World Trade organization in 2011, there was significant expansion in world trade from 1950 to 2000. This increase was documented to be over twenty-fold with foreign direct investment and exports playing a significant role. This increase in world trade in the middle to late 20th century also saw small businesses increasing their investments in cross border trading. This resulted in an increase in the average yearly outflow of Foreign Direct Investment (FDI) from about $25 billion in 1975 to a record $1.3 trillion in 2000. (UN, 2001). This means that there were a great number of business people with different social and cultural backgrounds doing business in other areas of different geographical, political, legal, social and cultural environments. The challenges that confronted these business people working in these different environments with its associated social and cultural problems created a platform for indulgence in ethical problems and other issues. (Dagdelen, Elibol & Yucel, 2009). Cross border trade experienced a great change...
Words: 2234 - Pages: 9
...and individual entrepreneurs to open online stores that mainly cater to consumers in China and abroad as well. I think they will grow over the next five or ten years with the 564 million Chines internet users. Furthermore, Alibaba is improving their business to comprehensive level. They have invested in some high-potential companies that could fuse well with its e-commerce business. To face the competitions from the companies in the same type, I agree with that they are going to make a virtual world to further reduce the competition. Moreover, while fighting to stay at the front line in Chinese e-commerce, Alibaba has ambitions of going international. Its initial strategy to bring Taobao abroad is clear: target Chinese users outside mainland China. As the mere description in Part 1, expanding to Korea with wholly owned model is the best way for a company like Alibaba. I think Alibaba’s main goal is maintaining their status in Asian by entering Korea. Alibaba’s intermediary model has replicability, which provides samples for other competitors to enter the industry, also increased their own competitors. It’s easy to enter the service industries with low barriers. Entering Korea could increase the popularity of Alibaba and bring more foreign capitals for them. With the international brand and huge capital’s help, Alibaba can beat new competitors easily. Moreover, with the China-South Korea Free Trade...
Words: 3008 - Pages: 13
...International Financial Management (IFM) Individual Project Report Title of the project- Foreign Debt crisis management of RCOM Batch–PGCBM -21 Centre –DAKC, Mumbai Name- Rajesh Kumar Verma Email- rkv3466@gmail.com, rajesh.kr.verma@relianceada.com SMS No- 110387 SID- RB12044 Table of Contents 1. Introduction 2. Purpose of the assignment 3. Gratitude to Professor and support staff 4. Introduction of IFM Assignment topic- Foreign Debt Crisis Management of RCom 5. Company Profile 6. Assignment analysis and study A. Reliance Communications has secured loans from a host of Chinese banks to refinance $1.18 billion B. RCom has filed a prospectus with the Singapore Stock Exchange and plans to divest as much as 75% stake in Flag Telecom to raise about $1 Billion i) Background of Reliance Globalcom (Flag Telecom) ii) Cable network of Flag Telecom iii) Solutions offered by Reliance iv) Strategic Move by Reliance to fight with debt crisis C. Reliance Communications has put on hold the initial public offering of its undersea cable unit Flag Telecom in Singapore D. Impact of heavy debt on company's financial credit worthiness and impact of rupee devaluation on overseas loan E. The impact of the high-debt levels has been further compounded because of the steep depreciation of the rupee 7. Impact of Un-hedged foreign currency debts due to rupee devaluation 8. Conclusion INTRODUCTION As a student of International Finance Management...
Words: 3768 - Pages: 16
