FATE HAS DOGGED plans by London-listed Standard Chartered to secure a secondary listing for its shares in Hong Kong - the marketplace in which it earns the single-biggest slice of its worldwide revenues. Originally scheduled for October 18 last year, the listing was postponed after the September 11 terrorist attacks and the blow they dealt to investor sentiment. Resurrected earlier this year and planned for some time in the second half - and then pushed back to some time in the final quarter - the plans are again under a cloud because of yet another collapse of investor sentiment. 'Clearly they postponed the listing last year and, at the time, that was blamed on weak equity markets and we are now basically in the same position,' SG Securities' London-based bank analyst Richard Staite said. Though the bank is still holding out for the possibility of meeting its second self-imposed deadline, there has been a subtle shift in emphasis. From 'strongly committed' ahead of the latest slide in global share prices, the official position has now shifted to 'depending on market conditions'. The new man at the helm, former Hong Kong chief executive Mervyn Davies, has made no secret of his enthusiasm for a secondary listing, while at the same time acknowledging the 'dilemma' this ambition presents for bank management. On the one hand, major shareholders want to see returns on their equity restored to historical levels of 20 per cent versus the current level of 12.3 per cent. This rules out a dilutive large issue of new shares. But listing in Hong Kong without placing a reasonable number of shares in local hands - especially in the hands of retail investors - would leave the counter virtually untraded in its new marketplace and render the exercise a waste of time and money. But somehow, Mr Davies has said, a creative solution must be found, since the rationale behind the plan was to raise the group's profile among SAR investors and widen its investor base. Mr Staite said the enthusiasm was easily understood. 'One of the problems is that Standard Chartered does not really have a natural shareholder base to tap into - it is considered to be a UK bank; it is a member of the 'Footsie' [the London market index]; and most of its shareholders are large UK institutions,' he said. 'However, it is now an Asian bank and it doesn't fit naturally in a UK portfolio. So ideally buyers should be Asian-focused - but they don't buy the shares because it doesn't have an Asian listing.' Remedying that problem by securing a secondary listing in Hong Kong, so the theory goes, would stimulate greater turnover in Standard Chartered shares, which would spill over into increased demand and a higher share price. Ultimately, Mr Staite said, the share registers should be split fairly evenly between the two markets 'and over time that is what they should be aiming for'. But giving that process a kick-start would require a reasonable number of shares in local hands at the time of the listing - and achieving that outcome without diluting return on equity is a challenge. One way out for management, he suggested, might be to buy back shares in London at the time of the listing, and re-issue them in Hong Kong. Bank spokesman Paul Marriage this week said that he could make no comment on whether Mr Davies had found his innovative solution yet. 'It is something we are spending some time on. The listing in Hong Kong is absolutely important to us, but we have also signalled that at 12.3 per cent, return on equity is not enough.' Making a tough decision even tougher, is the poor performance of Standard Chartered's share price. The bank had originally earmarked an issue of 5 per cent of its existing capital, likely to be priced at a small discount of just 2 per cent to the prevailing market price, with a minimum of 10 per cent of the issue for retail investors. Assuming a targeted issue of 56.42 million shares and based on a share price of HK$97 before September 11, the bank might have raised about HK$5.47 billion. At the counter's latest price of about HK$74 , the issue would raise about HK$4.17 billion.