eIPO Helps IPO Process
05 Oct 2000
The eIPO method, which was used for the first time in relation to the MTR privatization share offer, has helped the IPO process.
Evaluation of the latest statistics on the number of valid eIPO applications showed that an increasing number of investors use electronic means in subscribing new shares. The SFC has been working closely with the broking and banking industry in facilitating online trading and the eIPO process in Hong Kong.
“Having 12% of the total Hong Kong public offer and 13% of the value of the applications made through eIPO during the MTR IPO is a very significant step forward. eIPO has certainly helped to relieve the pressure on the traditional method in subscribing shares,” said Mr Keith Lui, SFC Director for Supervision of Markets.
“With increasing popularity of online trading, it is expected that more investors will find the eIPO method as a cost-effective means to apply for new shares. The SFC will continue to work with the industry to further improve the eIPO process,” he said.
Based on the number of valid eIPO applications received by the Central Registration Hong Kong Limited and other relevant information collected by the SFC, the statistics showed the following:
1. 15 brokers and 8 banks used websites to collect applications, representing 51% of all the 45 brokers and banks using the eIPO method. The other 49% used other means (e.g. telephone, written instructions) to collect applications.
2. 56,929 applications were collected through websites, representing 76% of all the applications through the eIPO method (which were 75,141). Brokers and banks accounted for respectively 21% and 79% of the 56,929 applications.
3. Subscription to the value of $4.218 billion was made through the websites, representing 58% of the total value of subscription through the eIPO method ($7.266 billion). Brokers and banks accounted for 28% and 72% of the $4.218 billion respectively.
4. The number of applications through websites (i.e. 56,929) accounted for 9% of the total Hong Kong public offer (which was about 610,000 applications).
The number of applications through the eIPO method (i.e. 75,141) accounted for 12% of the total Hong Kong public offer (which was about 610,000 applications).
5. The value of applications through websites (i.e. $4.218 billion) accounted for 8% of the total Hong Kong public offer (which was about $56 billion).
The value of applications through the eIPO method (i.e. $7.266 billion) accounted for 13% of the total Hong Kong public offer (which was about $56 billion).
Table 1 – Results of eIPO Activity in relation to the MTR Privatization Share Offer
No. of Firms | % | No. of | % | Amount of Applications | % | |
| Brokers using websites* | 15 | 33 | 12,106 | 16 | 1.164 | 16 |
| Brokers not using websites | 10 | 23 | 3,015 | 4 | 1.369 | 19 |
| Sub-total | 25 | 56 | 15,121 | 20 | 2.533 | 35 |
| Banks using websites | 8 | 17 | 44,823 | 60 | 3.054 | 42 |
| Banks not using websites | 12 | 27 | 15,197 | 20 | 1.679 | 23 |
| Sub-total | 20 | 14 | 60,020 | 80 | 4.733 | 65 |
| Total for eIPO method** | 45 | 100 | 75,141 | 100 | 7.266 | 100 |
Note:
* Including eIPO applications through Hong Kong Securities Clearing Company Limited.
** By using the eIPO method, brokers and banks can use the Internet or other means (e.g. telephone, written instructions etc.) to collect application information from investors. However, regardless of how applications are collected, brokers and banks must submit their application data files to the receiving banks or the share registrar through CD-ROMs or SD Net.
Page last updated 05 Oct 2000