Hong Kong Looks to Continue 2006's Good Times

Although there's been unprecedented investor demand for companies on the Chinese mainland, the biggest beneficiary has actually been Hong Kong equity markets, which soared to across-the-board highs in 2006 and attracted a wealth of IPO money.

The total market capitalization of Hong Kong's stock exchange recently hit an all-time high of HK$12.72 trillion, or $1.64 trillion. Hong Kong's largest index, the Hang Seng, reached an all-time closing high of 19265.32 on Nov. 23 this year.

In total, HK$471.29 billion, or $60.6 billion, of new capital was raised on the stock exchange in 2006, up 158% over last year.

"Hong Kong is well-positioned for next year, and there's still a lot more diversification and investment gains to come out of the markets there," says Justin Urquhart-Stewart, a director of Seven Investment Management, which invests in Chinese companies on the Hong Kong and Shanghai stock exchanges. ...