PETER Clarke, chairman of Merrill Lynch Asia Pacific, has warned that Hongkong may lose out in future listings of large mainland enterprises if lessons are not learned from the Shanghai Petrochemical issue. The issue of 1.68 billion shares, half of which were set aside for Hongkong, was badly received in the territory. More than 60 per cent was sold internationally through North American-style book-building. Mr Clarke said yesterday: ''Our objective is to help develop a long-term market in Chinese securities, both equity and debt, and in the process assist in the growth of Hongkong as an international financial centre.'' The open, fixed-price offer system used in Hongkong, which leads to many investors making highly leveraged subscriptions to ensure an allotment, would not work for large global issues as institutions elsewhere could not participate. ''The current method of equity issuance in Hongkong could be viewed as a cottage industry, perhaps suitable for small companies but unsuited to larger issues where institutional and international investors are pre-requisites,'' said Mr Clarke. Under book-building, bidding and pricing is negotiated between investors and lead underwriters to obtain a final issue price just before trading. Mr Clarke said it was untrue that book-building excluded retail investors. In the United States an average of 40 per cent of many large issues was sold to small investors. ''What needs to be devised is an offering structure which satisfies the demands of international investors while protecting the interests of the Hongkong public in terms of fair participation.'' ''The risk if Hongkong does not adapt is that increasing amounts of new issue business will move into the international markets by-passing Hongkong completely,'' he said.