Overview
In comparison with other nations in the Asia Pacific region, Hong Kong today provides numerous channels for IT financing. At the same time, companies in Hong Kong have easy access to international equity market. The wide-range sources for IT companies’ capital in Hong Kong include Hong Kong Stock Exchange, local banks, Hong Kong Growth Enterprise Market (HKGEM) and the Hong Kong Government.
Internationally, Hong Kong-based tech companies are only listed in NASDAQ and NYSE as of November 2002.
NASDAQ Listings
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| BNSO | Bonso Electronics International, Inc. | 06/27/1989 |
| CTEL | City Telecom (H.K.) Limited | 11/03/1999 |
| DSWL | Deswell Industries, Inc. | 07/19/1995 |
| HIHO | Highway Holdings Limited | 12/11/1996 |
| ICAB | i-CABLE Communications Limited | 11/24/1999 |
| NTAI | Nam Tai Electronics, Inc. | 03/28/1988 |
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| ATS | APT Satellite Holdings Limited | 12/17/1996 |
| SAT | Asia Satellite Telecommunications Holdings Limited | 6/18/1996 |
| PCW | PCCW Limited | 8/22/2000 |
As the10th largest stock market in the world and the second largest in Asia by market value, the Hong Kong stock exchange is not as active in technology IPOs as expected. Investors’ reception to technology IPOs in Hong Kong have never been as active as they are to company IPOs from the traditional economic sectors. Only a few technology IPOs, such as Tom.com in 1999, have generated across-the-board response from investors. Managing 30% of the total capital pool in Asia, Hong Kong has developed into the largest venture capital centre in the region. Hong Kong firms presently manages about USD 50 billion in funds and the boasts nearly 700 venture capital professionals, the second highest number in Asia after Japan. Hong Kong is largely the centre serving the region rather than an actual investment target. In 2000, 91% of the funds under management by venture capital firms originated from outside Hong Kong, and the lion's share of the funds were for companies in China. (40)
Position of Inward
Direct Investment by Major Economic Activity of the Hong Kong Enterprise
Group, 2000
Economic Activity
Stock of Inward Direct Investment at Market Value
HK $billion US $billion
Investment holdings,
real estate and various 2,145.9
275.1
business services
Wholesale, retail
and import/export trades
376.2
48.2
Banks and deposit-taking
companies
326.1
41.8
Financial institutions
other than banks and
deposit-taking companies
132.1
16.9
Manufacturing
76.1
9.8
Trannsport and related
services
73.5
9.4
Insurance
61.1
7.8
Communications
59.2
7.6
Restaurants and hotels
47.6
6.1
Construction
45.3
5.8
Other activities
208.2
26.7
Total
3,551.3
455.3
Notes
1.Individual figures
may not add up exactly to the total due to rounding.
2.Hong Kong Enterprise
Group (HKEG) mainly consists of a Hong Kong parent
company, its Hong
Kong subsidiaries, associates and branches.
3.Economic activity
here refers to the major activity of the entire enterprise group in
Hong Kong. As
a HKEG may engage in a wide variety of activities, the economic
activity is determined
on the basis of the principal line of business of the group.
Source: InvestHK
The Hong Kong Government has established the HK$5 billion (USD 641 million) Innovation and Technology Fund which has encouraged private sector collaboration with universities in technological research. Furthermore, the Government will offer subsidized rental rates to businesses qualified for operating in the Hong Kong Cyberport and the Hong Kong Science and Technology Parks. In the meantime, the government agency Invest Hong Kong has functions similar to Ireland’s Investment and Development Agency (IDA Ireland) and the Singapore Economic Development Board (EDB). The agency, founded in 2000, has funding and the mandate to support the development of Hong Kong’s technology future in biophamacology, information technology, telecommunications, tourism/entertainment, and multimedia with an annual funding of HK$17 million (USD 2.18 million). (41)
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