The United States listing of mainland companies will increase this year as the China story continues to catch investors' attention, according to a global accounting firm. 'Based on the number of deals in the pipeline, I believe the number of initial public offerings of mainland counters on the US markets will exceed that of last year,' said Edward Au, a partner at Deloitte Touche Tohmatsu. 'Last year, eight mainland companies listed there, while in 2004 there were more than 10,' he said. This compared with Hong Kong's GEM board, which in the three years ended 2005 saw 27, 21 and 10 mainland companies listing respectively. Although there were more Hong Kong listings, he said, the declining trend reflected companies' concerns of the capability of a secondary offering in Hong Kong. Moreover, US investors had a better perception of technology and high-growth stocks and this allowed companies to float their shares at a high valuation, despite the higher US compliance costs. Mr Au said telecommunications, media and tech stocks should remain the backbone of mainland US listings but sectors such as medical, environmental energy and companies with extensive consumer networks could also find favour. Currently, private enterprises dominated Chinese listings in the US while state-owned enterprises were rare. Mr Au said mainland companies were cautious as China Life was still facing a class action in the US following its listing in 2003. But while concerns remained, he believed they were still enthusiastic to go public in the west as Beijing hoped to show the world the success of its reforms. China Netcom, which listed in 2004, was the last state-owned enterprise floated in the US.
