Firms switch from GEM to main board

More firms are making the switch from the Growth Enterprise Market to the main board this year than last year. Most of them are small and medium- sized enterprises.

Five companies either switched or applied for the change so far this year, compared with 12 that moved to the main board in 2010.

Three other GEM firms that had revealed plans to transfer last year have not submitted their applications yet.

"The switch can boost the share liquidity of the firms, which will help them with further financing," said Ricky Tam Siu-hing, chairman of the Hong Kong Institute of Investors.

He added: "It also gives the company a better corporate image."

SMEs start to tap public capital through the Growth Enterprise Market, and when they expand they seek support from funds and institutional investors.

"These investors seldom have much confidence in GEM companies," said Jeslie Chui, an assistant professor at the University of Hong Kong. "A company on the main board can cost more than HK$400 million, compared to HK$250 million for a GEM firm."