Asia's internet leaders: Asia's new economy
Extraordinary scenes have unfolded as Asian investors rush to buy shares in new vehicles set up to profit from growing use of the internet. The police have even been called in to restore order among hopeful punters. Asia's new economy is changing the face of capital markets in the region. Hong Kong no longer sees itself as a property-based economy but as a centre for capital formation in the internet age. Growth estimates for internet revenues are mouthwatering, with the Chinese language market as the ultimate prize. But this is still Asia. The new economy entrepreneurs are the old economy billionaires minus their suits. Their plan might be to use temporarily overvalued internet shares as currency to grab real assets, reports Phillip Moore
You don't need to be too long in the tooth to recall the stunt pulled one April Fool's Day by a leading Hong Kong-based broker. At the height of the emerging markets frenzy of the early 1990s, Smith New Court sent its clients a research bulletin dated April 1 which urged them to buy into a forthcoming IPO from Bhutan Dry Docks. The response was a handful of preliminary orders from investors apparently oblivious to the fact that Bhutan is a tiny, land-locked country with no stock market.
The joke has come closer to reality with the technology IPOs that have gripped Hong Kong's imagination this year. Just how close is anybody's guess, but internet-related companies with no earnings and negligible track records are cascading onto Hong Kong's stock market, and local investors can't get enough of them.
The most striking example of mass internet hysteria came at the end of February, when Hong Kong's police were called out to control more than 200,000 individuals who besieged HSBC's offices to hand in applications for shares in the IPO of tom.com. The cocktail of the dot com element of the offering and the involvement of Li Ka-shing was too much for Hong Kong's investing public to resist.