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APX open for business, with China
Source: Sydney Morning Herald   By: Shaun Drummond

The Asia Pacific Stock Exchange has been a long time coming. It finally listed two Chinese companies last week six years after entrepreneur George Wang bought the licence from the failing Austock Group in 2008.

Despite the delay, Mr Wang said he had big plans for the new Chinese Australian stock exchange in Sydney. ''There will be a small number [of companies] initially,'' he said. ''We need to put the time in to make sure the systems are right. Once we are 100 per cent confident, then we will move very fast.''

Diet supplement maker Australia Samly Holdings raised $4.6 million and parcel and packaging firm ZhongHuanYun Holdings Group $3.5 million before listing but the exchange's management said it expected up to another 10 companies to list this year.

Both companies listed above their issue price but fell short of what they were looking to raise. Australia Samly wanted to raise up to $10 million and ZhongHuanYun $6.6 million.

Mr Wang said investors in China still preferred to buy property because they did not trust shares. So his pitch was that they could invest in Chinese companies under Australia's robust governance standards via APX. ''In China there is no shortage of company, no shortage of capital [but] there is shortage of transparency,'' he said.

Much like other smaller exchanges that have sprung up in Europe or the US, it will specialise in sectors under-represented or over-represented on the main exchange - smaller agribusiness, tech start-ups, miners that can get lost in the huge number of resource socks on the ASX.

''The companies we start with, it is not because they are big or small but because of their growth story - 30, 40, 50 per cent [growth] a year,'' he said. ''If the company is very big it won't grow much or it may be going down - why would an investor want to invest in that.''

Chief operating officer David Lawrence said the exchange would differentiate in several other areas.

If regulatory approval is granted, APX will allow trading in stocks in Chinese yuan as well as Australian dollars.

He hopes this will attract Chinese retail investors by removing the currency risk for them. The huge number of potential investors in China could then quickly build up liquidity in the exchange.

The aim was to bring companies to Australia that had never listed here before. ''We're growing the pie, not eating it,'' he said.

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