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Hong Kong Losing Its Shine as Attractive IPO Market?

This is a transcript of top stories presented by China's CCTV Business Channel as produced by CNBC Asia Pacific.

Good evening, I'm Christine Tan and you're watching "Asia Market Daily".

Commodities trading giant Glencore remains on track to hit the Hong Kong market this Wednesday, following its London debut tomorrow.

But only a small part of its mega-listing will take place in the Chinese territory.

Is Hong Kong losing its shine as one of the world's biggest IPO markets?

CNBC's Bernie Lo finds out.

The 11 billion dollar dual listing is one of the biggest in London's history. CEO Ivan Glasenberg says listing in Hong Kong will bring the name Glencore closer to important Asian markets.

(SOT) Ivan Glasenberg, CEO, Glencore:
"It's a high profile leading global stock exchange, the depth of the local active and passive investor base with own associated pool of demand including a large retail investor base, secondly market liquidity and high level investor engagement."

But only 2 and a half percent of the float has been allocated to Hong Kong, which doesn't suggest a lot of liquidity. Recent secondary listed shares, despite a lot of initial hype, haven't seen much activity. Trading volume for Brazilian miner Vale, insurer company Prudential and Japanese broker SBI holdings has been low.

Consider commodity name Vale. On average just a few thousand shares get traded each day in Hong Kong, compared to millions in Brazil and in New York. Companies listed in multiple places seem to face similar problems when it comes to attracting investors.

(SOT) Mark To, Head of Research, Wing Fung Financial:
"Investors have to care about the currency issue and also the other regulation issues. That's why somehow they are not really interested in doing that much calculation if the issue is not quite hot in terms of its theme or investment top pick."

Instead of gigantic flotations, many investors now prefer smaller bets that can reap quick profits.

(SOT) Mark To, Head of Research, Wing Fung Financial:
"The market capitalization is really large for it to enjoy very significant rise for the first day of IPO. And we can see that the investment for the retail investors may cost them quite a bit of money for the very short term."

But the IPO market in general has been slow so far, hurt by unrest in the Mideast and the Japan quake. Total funds raised in the Asia Pacific dropped by over half to just 8 and three quarter billion dollars in the first quarter.

But accounting firm Deloitte Touch Tohmatsu predicts Hong Kong's IPO market will pick up in Q2. And Analysts expect this trend to continue, due to its close proximity to China, where the market is growing for almost every industry.

The IPO traffic here continues to pick up pace. In the months to come, fashion houses, Prada, Coach, luggage makers like Samsonite and even BNP Paribas will be landing. But the question is, is luring a big brand name enough, or should the exchange be working on infrastructure, like building business trusts.

(SOT) Warren Gilman, Chairman and CEO, CEF Holdings:
"To have a breath structures in the market is something that would create wealth, create volume, create jobs, create growth in Hong Kong. Chasing after individual names are certainly a short-term strategy. We need greater breath and thought to it."

Until then though, Hong Kong investors have few other options, than to chase IPOs. Bernard Lo, CNBC Hong Kong.

Well that wraps up the latest "Asia Market Daily". I'm Christine Tan from CNBC, thanks for watching.

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