Multimedia investor hopes the switch to the main board will boost the stock Tom Group will be the first company to transfer its listing to the main board from the Growth Enterprise Market (GEM), after being granted a number of waivers by the Hong Kong Exchanges and Clearing. The multimedia investment firm said yesterday that it would list on the main board 'by introduction', which does not involve issuing shares. The company said it had applied for and received a waiver from HKEx that would allow it to issue additional shares within six months of listing. It also won an exemption from the listing rule that prevents controlling shareholders from disposing of their holdings if the company issues new shares within six months of listing. HKEx also exempted Tom Group from a regulation requiring a minimum period of three months between a shareholder's resolution approving the withdrawal of a company listing and the actual delisting of shares. Tom Group plans to seek shareholder approval on July 23 to switch listings, and start trading on the main board on August 4. Morgan Stanley is sponsoring the transfer. The company hopes that moving to the main board will boost share liquidity, and give the stock increased coverage by analysts and investment funds. 'It will be positive to both share performance and trading volume,' chief financial officer Tommei Tong said. Ms Tong said it was too early to say if subsidiary Tom Online - which listed on the second board in March - would follow the parent company to the main board. Tom Group shares closed 1.26 per cent higher at $1.60 yesterday, but still trades below its initial public offering price of $1.78 four years ago. Some analysts are sceptical about whether the switch will have a significant effect on share performance. 'It all depends on the fundamentals of the firm,' Pacific Sun analyst Andrew Chan said. 'A good company will attract investment and attention even if it lists in Bangladesh.' A recent relaxation of listing regulations allows any GEM-listed firm to switch to the main board if it posts annual sales of $500 million, or shows a profit of at least $50 million, in the previous year. Tom Group reported a profit of $12.59 million on revenues of $2.08 billion last year. Other companies planning to abandon the GEM for the main board include Hongkong.com and CK Life Sciences International, which has the largest market capitalisation on the second board. Changing rules Firms can join the main board if they have $500 million in sales Tom Group reported revenues of $2.08 billion for last year Other companies are also planning to make the switch
