WHEN CHINESE garbage company Fujian Fengquan Environmental Protection Co. decided to list its shares overseas, it made what seemed like an odd choice: It chose the German stock exchange Deutsche Boerse AG.
With China's market booming, prices probably would have been higher back home. And historically, when Chinese companies have done initial public offerings abroad, they have usually chosen New York or London.
But Fengquan is one of several Chinese companies starting to take advantage of capital markets in continental Europe. A sign of China's broadening economic relations overseas, these companies are looking to markets like Frankfurt, the German financial capital, to take advantage of business ties or to boost their brands in Europe. In July, Fengquan listed in Frankfurt as ZhongDe Waste Technology AG, raising $130 million and moving its headquarters to Hamburg, Germany, from the Chinese province of Fujian.
Earlier this month, Asian Bamboo AG completed its listing on Frankfurt's main exchange, raising $130 million. Vtion Wireless Technology AG announced this week that it is doing a pre-IPO road show and expects to raise as much as $150 million.
Depending on market conditions, German underwriters expect an additional half dozen to list on the main board next year, too.
Still, even if all these deals come to fruition, Frankfurt and other European exchanges won't soon challenge New York or Hong Kong for dominance in overseas listings of Chinese companies.
Europe has less than 1% of the total dollar value of Chinese companies' initial public offerings. About 96% have listed in Hong Kong with the rest in Singapore and New York.
But Chinese listings in continental Europe are likely to rise as Chinese companies move more aggressively into Europe, where they are slowly starting to penetrate.
The listings are supported by a new policy by Deutsche Boerse to seek out Chinese companies. The stock-market operator began two years ago to court Chinese companies and support local underwriters, like Sal. Oppenheim jr. & Cie., a privately held German investment bank. The Cologne-based firm recently opened an office in Hong Kong and has had a hand in all recent listings.
'We think we can get enough companies to create a critical mass in Frankfurt so that investors and analysts pay attention to the companies,' said Wolfgang Jensen, Oppenheim's managing director for investment banking.
The Chinese companies are taking advantage of IPO growth on European exchanges, which last year had a higher value of IPOs than U.S. markets. Also, some non-U.S. companies have been turned off by the Sarbanes-Oxley Act, which tightens accounting and disclosure requirements for companies listed on U.S. exchanges.
With China's market booming, prices probably would have been higher back home. And historically, when Chinese companies have done initial public offerings abroad, they have usually chosen New York or London.
But Fengquan is one of several Chinese companies starting to take advantage of capital markets in continental Europe. A sign of China's broadening economic relations overseas, these companies are looking to markets like Frankfurt, the German financial capital, to take advantage of business ties or to boost their brands in Europe. In July, Fengquan listed in Frankfurt as ZhongDe Waste Technology AG, raising $130 million and moving its headquarters to Hamburg, Germany, from the Chinese province of Fujian.
Earlier this month, Asian Bamboo AG completed its listing on Frankfurt's main exchange, raising $130 million. Vtion Wireless Technology AG announced this week that it is doing a pre-IPO road show and expects to raise as much as $150 million.
Depending on market conditions, German underwriters expect an additional half dozen to list on the main board next year, too.
Still, even if all these deals come to fruition, Frankfurt and other European exchanges won't soon challenge New York or Hong Kong for dominance in overseas listings of Chinese companies.
Europe has less than 1% of the total dollar value of Chinese companies' initial public offerings. About 96% have listed in Hong Kong with the rest in Singapore and New York.
But Chinese listings in continental Europe are likely to rise as Chinese companies move more aggressively into Europe, where they are slowly starting to penetrate.
The listings are supported by a new policy by Deutsche Boerse to seek out Chinese companies. The stock-market operator began two years ago to court Chinese companies and support local underwriters, like Sal. Oppenheim jr. & Cie., a privately held German investment bank. The Cologne-based firm recently opened an office in Hong Kong and has had a hand in all recent listings.
'We think we can get enough companies to create a critical mass in Frankfurt so that investors and analysts pay attention to the companies,' said Wolfgang Jensen, Oppenheim's managing director for investment banking.
The Chinese companies are taking advantage of IPO growth on European exchanges, which last year had a higher value of IPOs than U.S. markets. Also, some non-U.S. companies have been turned off by the Sarbanes-Oxley Act, which tightens accounting and disclosure requirements for companies listed on U.S. exchanges.