Research On Growth Enterprise Market

Hong Kong is the entrance door to Mainland China and has close business relationships with Asian and other Western economies. With open and free economic policies, Hong Kong has developed into a prestigious international finance centre. In 1997, Asian financial crises caused Hong Kong to reconsider its future economic development. In order to strengthen its position as an international finance centre, the Government of Hong Kong Special Administrative Region has established the Hong Kong Growth Enterprise Market ("GEM") in late 1999. It provides a new capital-raising channel for the development of fast growing and high quality small and medium sized enterprises. After the bursting of 'NASDAQ', the amount of capital raising, share prices and trading volume of GEM are continuously declining. The confidences of local and international investors are diminishing. The performance of GEM is not satisfactory as expected. As such, the problem of how to rebuild GEM, to recover the confidences of investors is a worthwhile topic to be discussed.The aim of this Thesis is to explore and discuss the GEM's listing rules and monitoring system, its economic and market characteristics and its advantages and risks. With the lessons and experiences learnt from the success and failure of overseas growth enterprises markets, under the special economic environment of Hong Kong, we suggest several measures to rebuild the confidence of investors in GEM by virtue of both theories and practices analysis.