NYSE Euronext eager to pull HK, mainland listings away from LSE

NYSE Euronext, the world's largest stock exchange, is increasing attempts to lure Hong Kong and mainland companies looking to float overseas away from the London Stock Exchange.

The move comes one month after Lionax International Investment Holdings, a Hong Kong-based group that designs and develops vehicle technology products in Jiangxi province, became the first Chinese company to list shares in Paris.

'NYSE Euronext intends to be the partner of choice for [Chinese] companies looking for a world listing,' NYSE Euronext deputy chief executive Jean-Francois Theodore told a forum in Hong Kong yesterday.

The European arm of the exchange lags far behind the London Stock Exchange (LSE), which is home to 14 Hong Kong and six mainland companies, including China Petroleum & Chemical Corp (Sinopec). A further 61 Chinese firms are listed on AIM, the LSE's specialist exchange for small- and medium-sized companies.

NYSE Euronext was formed after a merger between the New York Stock Exchange and Euronext in April.

European financiers are also hoping that recent volatility caused by the fallout from the subprime mortgage market crisis in the United States will prompt Asian investors to diversify into Europe's capital markets, which have survived the global credit crunch relatively unscathed.

With forecasts of zero growth or even a recession in the US later this year, European stocks are looking increasingly attractive.

Although mainland investors are barred from investing in foreign stocks outside Hong Kong, continuing reforms to allow capital outflows from the country's overheated economy mean that Paris may soon become a target for mainland liquidity.

'China must find an alternative way to recycle its trade dollars. If the experiment to allow individual mainland investors to buy Hong Kong stocks succeeds, I expect the government to extend this to international stocks within two to three years,' said Qu Hongbin, the chief China economist at HSBC.