Chinese jewellery firm Shuibei could be Hong Kong's first dual-currency IPO

Shuibei Jewelry, a mainland retailer of mass-market jewellery and accessories, is preparing to raise as much as 500 million yuan in what could be Hong Kong's first Initial Public Offering to raise both yuan and Hong Kong dollars in one tranche of shares.

The Shenzhen firm submitted a listing application to the Hong Kong stock exchange earlier this year and is preparing to attend a listing hearing next week after a recovery in Hong Kong's IPO market last month, according to people involved in the deal.

The yuan IPO can be conducted as either a "dual tranche single counter" or "dual tranche dual counter" model, according to Hong Kong Exchanges and Clearing. The former structure allows companies to issue shares in yuan only, while the latter allows shares to be issued in both Hong Kong dollars and yuan.

It was earlier reported that mainland chemical producer Meilan International could be the first company to raise both yuan and Hong Kong dollars in a dual-currency IPO.

The Shuibei share issue may be small, but a successful sale could be another landmark for the city and local bourse, which have promoted the greater use of yuan for trade and investment purposes on the back of Beijing's ambition to make the yuan a truly international currency.

In his official blog yesterday, Financial Secretary John Tsang Chun-wah said Hong Kong would remain competitive if the yuan was fully convertible as the city had gained first-mover advantage as an offshore yuan centre, and had mature banking and financial infrastructures.