Looking back to the performance of global stock markets in 2006, it is hard to deny Hong Kong's position of the most attractive to global investors with newly listed Chinese mainland companies as the shining gold mines waiting to be explored.
Hang Seng Index started its climbing from 17,500 points early October and keeps its momentum of going up until Wednesday's 19,725.73 points, pushing a market value over 13 trillion HK dollars (around 1.68 trillion U.S. dollars), a new record in its history.
Experts still refused to estimate the climax of the index with only three trading days left to the end of 2006 because they believe the market's expectation is still high with money eager to buy though the risks are accumulating with the index going higher.
The performance of H-Shares (Chinese mainland companies listed in Hong Kong) in the year is even more brilliant with its index breaking records one after another and reaching its history high Wednesday at 10,258.31 points by surging 665.24 points.
Market analysts believe Chinese mainland stocks have become the engine to take Hong Kong stock market running forward. According to figures from the World Federation of Exchanges, Hong Kong stock market has beat New York as the second most popular market by raising 326 billion HK dollars (41.95 billion U.S. dollars) this year in initial public offerings following London that raised 48.92 billion U.S. dollars.
Among the 326 billion HK dollars raised in Hong Kong market, 232 billion HK dollars belong to the success of public listings of mainland financial heavyweights, such as the Bank of China, the Industrial and Commercial Bank of China and the Commercial and Merchants Bank of China. And the list of Industrial and Commercial Bank of China becomes the largest initial public offering in the world this year.
Analysts said the recovery of the Hong Kong economy partly contributes to the flourishing of the Hong Kong stock market but the main driving force is still the fast growing economy of the Chinese mainland which makes the investors more confident in the market.
To investors, mainland factor has become the much favored investing element since the rapid economic growth of the Chinese mainland and the going up of RMB (Chinese currency) makes investors believe that as long as they can get on the fast running train of the Chinese market their harvest will be doubled or tripled comparing with investing in other markets.
And the best and safest way to invest in this lucrative market is to invest in Chinese mainland companies listed in Hong Kong, because their management and earning ability are examined and guaranteed before they are allowed to raise capitals in the market.
To Chinese mainland companies, the Hong Kong stock market is the nearest door to international investors where they can get the most needed capitals and the international platform where they can learn the skill of management by communicating with investors and competing with their counterparts.
Looking forward to the coming year, most analysts believe the bull market will continue and the Hang Seng benchmark will reach 20,500, according to an investigation by Reuters.
They believe the local economy will keep growing on the right track and the economic growth rate of the Chinese mainland will be above 9 percent. The success of public listings this year may encourage more mainland companies to list in Hong Kong, which will be a strong support to the Hang Seng Index.
