Two of the world's leading stock houses are teaming up to seek a dual listing of the shares that they are now posting individually in a move to improve their competitive edge and attract more high-profile companies and investors into their markets.

Earlier this year, the Hong Kong Exchanges and Clearing Limited (HKEx) and the London Stock Exchange began working together to make it easier for companies to list in both Hong Kong and the United Kingdom.

In addition, the exchanges plan to introduce the trading of HKEx stocks on London's SETS trading system and London stocks on Hong Kong's trading system.

The strategy is believed to be a key step to cement the positions of both firms in the current market, where alliances and collaborations are an inevitable trend.

Insiders also see the plan as a way to lure more China-based large companies to raise money on their markets, as a dual listing would give the companies planning an initial public offering (IPO) access to capital markets in both Asia and Europe.

The competition to persuade high-profile Chinese companies to go public on overseas markets turned fierce as top officials with most of the world's leading capital markets - including the Hong Kong Stock Exchange, the Singapore Exchange, NASDAQ and the American Stock Exchange - rushed to Beijing this week, in anticipation of lobbying these companies to list on their market.

"Listing on our market will be much more cost-effective (than other choices)," said Marc Bailey, director of the business development department of the London Stock Exchange, who is on his first trip to China.

"We will continue our efforts to extend cooperative relations with the other two Chinese stock exchanges," said Bailey, adding that the two parties have not yet made any concrete decisions.

Both exchanges will now meet with their market participants to seek their views on the proposed trading arrangements. A listing facilitation program is being developed to enable companies listed on one exchange to list on the other through a streamlined process.

"If a sufficiently attractive business case can be developed, the exchanges would seek to introduce the trading collaboration in 2003," but subject to regulatory approval, said both companies in a news release.

(China Daily May 25, 2002)