Global IPO Market INTRODUCTION Global Stock Exchanges in

Global IPO Market INTRODUCTION

Global Stock Exchanges (in terms of market capitalization in 2012) London (4 th: USD 3, 396. 5 bn ) New York (1 st: USD 14, 085. 9 bn ) NASDAQ (2 nd: USD 4, 582. 4 bn) Tokyo (3 rd: USD 3, 478. 3 bn ) Shanghai (7 th: USD 2, 547. 2 bn ) Singapore (21 st: USD 765. 1 bn ) Shenzhen (16 th: USD 1, 150. 2 bn ) Hong Kong (6 th: USD 2, 831. 9 bn) Source: World Federation of Exchanges (as at December 2012) Hong Kong Exchanges and Clearing Limited

Equity Markets 2012 Performance indicator Market capitalisation Number of listings Value of share trading Number of Electronic Order Book (EOB) trades Value/unit % difference (comparing to 2011) USD 55 trillion + 15. 1% 46, 332 - 0. 8% USD 49 trillion - 22. 5% 9780 million - 14. 3% Source: World Federation of Exchanges

Average Value of Trades Source: World Federation of Exchanges

Global Funds Raised in 2012 (US$ million) Source: Hong Kong Exchanges and Clearing Limited

Trends in the Global IPO Market Ø Global IPO market is expected to pick up in 2013, due to: • Strengthening US economy • Anticipated economic recovery in Europe and Asia in the second half of 2013 • Reduced stock market volatility • Assertive actions from central banks • Brighter earning outlook Ø Rising investors’ confidence • Four in every five institutional investors interviewed by Ernst & Yong in November and December 2012 invested in pre-IPO or IPO stocks in the past 12 months (In contrast, only one in five during the past 2 or 3 years) Source: Ernst & Young, “Right team, right story, right price” Inside Investor Relations

Trends in the Global IPO Market Top 5 preferred investment destinations 1. United States 2. Mainland China and Hong Kong 3. Brazil 4. Other Asia-Pacific countries 5. United Kingdom Top 5 preferred investment sectors % of investors* Financial services 51% Consumer retail 35% Consumer products 27% Oil and gas 27% Technology 21% * Featured most often in investors’ top three in the survey conducted by Ernst & Young Source: Ernst & Young, “Right team, right story, right price”

Benefits of an IPO Benefits a successful IPO can bring to a company include: Ø Source of long-term capital Ø Creation of liquidity Ø Raised company profile and positive public image Ø Attraction of foreign partnerships Ø Enhanced employee morale and loyalty Ø Improved efficiency of the business Ø A potential exit strategy for the current owners

Factors for a successful IPO Factors affecting IPO success include: Ø Attractive pricing Ø Compelling equity story Ø Confidence in management Ø Right timing Ø Readiness to provide transparency and good corporate governance Ø Size of transaction Ø Reputation of the banking syndicate Ø Listing venue selection Source: Ernst & Young, “Right team, right story, right price”

Procedures to IPO Ø To go public, companies are required to fulfill certain listing requirements set by the stock exchange of the jurisdiction in which the company wishes to be listed Ø To know more about listing procedure and requirements in various jurisdictions, please refer to the IPO guides prepared by Legalink