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Morgan Stanley predicted that the year 2002 will see merger and acquisition activities play an increasing role in China, with listing of more local companies.
Speaking to the Hong Kong-based Finance Asia Magazine, Morgan Stanley's managing director and head of China investment C.G. Wu said that although the year 2001 was a quite year for domestic and international IPOs out of China, the company estimated that some 15 billion dollars was raised domestically and just 2 billion dollars internationally, compared with 25 billion and 22 billion dollars in 2000 for the two items respectively.
Assuming the macro economic environment improves this year, the company expects Chinese companies to continue to access the capital markets less than in 2000, but significantly more than this year, Wu said.
"Many companies in China are preparing equity offerings such as A-share issues or possibly China Depositary Receipts, and with the market capitalization in China already being 560 billion dollars, the market has vast potential in terms of primary and secondary markets," he said.
On the company's partnership with China International Capital Corporation (CICC), Morgan Stanley's managing director Mario Francescotti stressed that the partnership is clearly an important part of the company's overall China commitment.
"We are very happy with CICC. Together we have been able to capture a very solid market share in China. CICC gives us an advantage in terms of understanding the local market. It's a very successful joint venture," he said.
Currently, Morgan Stanley owns 36 percent in CICC, which was created six years ago from the Chinese government's desire to create a first class local investment bank.
( January 2, 2002)
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