Bio-technology - The Readiness of Hong Kong Opening Speech by Dr. K. S. Lo Chairman, GEM Listing Committee, Hong Kong Exchanges and Clearing Ltd. 21 October 2002 Hong Kong
Comparison of Major Asian Second Boards(Jan 2001 - Jun 2002) HK MALAYSIA TAIWAN SINGAPORE KOREA JAPAN GEMKLSE SBROSESESDAQKOSDAQMOTHERS No. of Companies 137 291 397 113 810 36 Funds Raised 821 135 720 89 1,571 236 Turnover 8,662 5,606 124,574 3,710 478,761 5,708 Market Cap. 7,759 4,772 42,898 2,348 40,921 5,743 Opened since 1999 1988 1989 1987 1996 1999 (In USD million) GEM ranked 2nd in terms of fund raising and 3rd in terms of turnover and market capitalisation
HK Investors' Appetite for Bio-tech and Pharmaceutical Stocks in GEM September 2002 Turnover of GEM bio-tech and pharmaceutical stocks: HK$782 million Total market turnover of GEM: HK$1,639 million Bio-tech and pharmaceutical stocks contributed to about 48% of total market turnover
Basic Listing Requirements of GEM • No profit requirement • Focused line of business • 2 years of active business pursuits under substantially the same management and ownership (may be reduced to 1 year if certain additional conditions are met)
Role of Hong Kong in Biotech Development • Hong Kong is way behind US, Europe, Singapore and Taiwan in biotech development. • Hong Kong has advantages to attract talents to congregate here : Sound system of law, attractive living standards, technology transfer base, vast hinterland market, developed capital formation centre. • Find niche markets: for medium and long term development Asian diseases, stem cell research, gene therapy, biotech in agriculture. • Most importantly: for short term opportunity. Technology transfer: act as middleman. Capital formation centre for biotech in Greater China region.
Government Must Take the Lead • Formulate long term biotech development policies, e.g. build up strong science base in universities. • Fund more grants for biotech R&D. • Establish regulatory regime for drug trial center formation. • Invest in downstream applied technology projects in biotech. • Facilitate R&D partnership with larger overseas research institutions and companies. • Help recruit big name biotech experts. Government to act as Facilitator and Enabler only Government to help kick start the industry
Future Development of HK Bio-technology Industry Government: formulate and execute policies regarding innovation and technology development Bio-tech increase the level of understanding Community : and awareness of bio-tech industry GEM: provide an effective venue for bio-tech companies to raise funds