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Dec 07, 2010

Vale debuts HDRs in Hong Kong

Mining firm aims to build its profile in Asia through the listing of the first Hong Kong depositary receipts

Vale, the Brazilian mining giant, today launched the first ever Hong Kong depositary receipts (HDRs) as it seeks to expand its presence in Asia.

The company made its common shares and preferred class A shares available through the listing, although it did not raise any new money.

Vale wants to expand its operations in Asia – and particularly China – as it seeks to capitalize on growing demand for minerals and metals.

The company hopes a Hong Kong listing will support this strategy by raising its profile among investors and customers in the region.

‘Vale believes a secondary listing in Hong Kong is a significant step in raising its profile in, and demonstrating its commitment to, Asia,’ it said in a statement.

The Hong Kong bourse is particularly attractive because it offers good access to retail investors in Asia, according to people who worked on the listing.

They point out that 25 percent to 30 percent of investable money on the bourse comes from private shareholders.
Vale CFO Guilherme Cavalcanti said earlier today the company would like to grow its number of retail shareholders in Asia, according to Bloomberg.

Following today’s listing, Vale now has a presence on stock markets in South America, North America, Europe and Asia, which means it can be traded on major stock exchanges almost 24 hours a day.

As well as in Hong Kong, Vale is listed on the Brazilian stock exchange BM&FBOVESPA, the New York Stock Exchange and NYSE Euronext in Paris.

The listing will act as a boost to Hong Kong as the bourse seeks to position itself as the main gateway to the Chinese market for companies and investors.

Vale becomes the third major international listing in Hong Kong this year, following UC Rusal, the Russian aluminium company, and French cosmetics group L’Occitane.

JPMorgan acted as the depositary receipt bank for the HDR listing.