Choosing Hong Kong Over the NYSE

INDIE RESEARCH – TICKERSPY.COM   December 6, 2010

Last week, Chinese oil and gas exploration and production firm MIE Holdings withdrew plans for an IPO on the NYSE, noting that, “market conditions in the U.S. do not at this time support a public offering.” Instead, MIE will now list exclusively on the Hong Kong Exchange, raising $165 million with the offering of 662 million shares, about a third of which are being offered by existing stakeholders.

Over the last three months, China Kanghui (NYSE: KH – News), HiSoft Technology (NASDAQ: HSFT – News), and Andatee China Marine Fuel (NASDAQ: AMCF – News) are all among U.S.-listed China plays to outperform in the 2010 IPOs Index, gaining 37% or more. Meanwhile, SinoTech Energy (NASDAQ: CTE – News), which is the closest MIE Holdings comp to debut on a U.S. exchange in the last several months, has slipped by -35% since its early-November IPO.

Elsewhere in the Chinese Oil and Gas Stocks Index, seven of the other eight components are ahead by double digits over the past three months. CNOOC (NYSE: CEO – News), Longwei Petroleum (AMEX: LPH – News), and Sinopec Shanghai Petrochemical (NYSE: SHI – News) are all up by more than 25% for the period.

Just last week, Chinese officials said they planned to tighten monetary policy in 2011, suggesting further attempts to cool the rapidly growing economy. It will be interesting to see whether Hong Kong-listed stocks, or any of the U.S.-listed China Stocks and ADRs Index components are impacted by the measures next year.