Here’s Why the HKEx is the New NYSE
Late last week, Prada‘s IPO was approved at $2 billion by the Hong Kong Stock Exchange, with tentative plans for going public June 24 of this year. And Prada is just one of many consumer brands vying for a spot on the HKEx, with many luxury brands such as Jimmy Choo, Coach (NYSE:COH), and L’Occitane (to name a few) preparing their IPOs in the last year. So why is the HKEx so popular?
Hong Kong was “the world’s biggest IPO market last year, with US$57.7 billion raised from 87 listings”, while the New York Stock Exchange (NYSE:NYX) raised significantly less at $39.1 billion from 99 listings in 2010, while exchanges in Europe aren’t faring so well with the sovereign debt crisis and the devaluation of the euro. If that weren’t incentive enough, the Chinese (NYSE:FXI) government is willing to pitch in to make it worth your while. China Investment Corp., the nation’s sovereign wealth fund, stepped in to buy $50 million worth of shares in L’Occitane Cosmetics last year, over 7% of their IPO.
Apparently a new class of consumers in China (NYSE:FXI) has been snatching up these newly available luxury goods and China is expected to become the top market for luxury goods, beating out the U.S., by 2020.
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