Turnover just 3pc of total market value as China firms prefer to list elsewhere
Hong Kong's Growth Enterprise Market (GEM) was the world's worst-performing second board last year with the lowest liquidity, according to a study by accounting firm Grant Thornton.
The study found that the GEM's liquidity, measured by the average monthly turnover of shares as a percentage of its total market value was 3 per cent last year, making it the lowest among 33 second boards worldwide.
That compared with 75 per cent for South Korea's Kosdaq, 39 per cent for Japan's Mothers Market, 9 per cent for Britain's Alternative Investment Market (AIM) and 7 per cent for Singapore's Sesdaq, the survey showed.
The GEM, designed to enable financially weaker firms to tap the equity market, failed to ride on the strong fund-raising demand from mainland privately owned enterprises so far this year, losing its market share of mainland initial public offerings to Singapore and London, the study showed.
Only four mainland companies made their debuts on the GEM in the first seven months of this year compared with 11 on the Sesdaq in the first four months and 15 on the AIM in the first half.
'Market positioning has been the GEM's biggest issue,' said Grant Thornton partner Andrew Lam.