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HKEX reforms that brought Alibaba, Meituan and Xiaomi listings to the city to be expanded

  • 146 new economy companies have raised US$88 billion in Hong Kong since the reforms were introduced in 2018
  • The extension is still in a two-month consultation period, which ends in May

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13 US-listed Chinese companies have raised HK$285.8 billion through secondary listings in Hong Kong since the reforms were launched in 2018. These include Chinese food delivery platform Meituan, Alibaba and search engine Baidu, among others. Photo: Bloomberg
Enoch Yiu

Bourse operator Hong Kong Exchanges and Clearing (HKEX) will extend reforms introduced in 2018 to attract more listings by new economy and international companies, it said on Thursday.

The reforms have helped turn HKEX into the world’s most valuable financial market place operator over the past three years. They have over this period changed the landscape of the stock market, which has emerged as a fundraising hub for new economy and biotechnology companies.

“We are very pleased to see that the introduction of the new listing regime has helped to transform our markets. HKEX has become the go-to international capital market for new economy companies, and is already the world’s second-biggest biotechnology fundraising hub,” said Calvin Tai, the company’s interim chief executive (CEO). “HKEX will continue to enhance the competitiveness of its markets, whilst maintaining their quality, resilience and attractiveness as a leading global financial centre.”

The extension is significant because the listing reforms have already changed the complexion of the Hong Kong markets. A total of 146 new economy companies have listed in the city between the launch of the reforms in April 2018 and March this year, raising a total of HK$682.2 billion (US$88 billion) in the process. The initial public offering (IPO) proceeds raised represent 61 per cent of all funds raised in this period, according to exchange data.

The extension is still in a two-month consultation period, which ends in May. As part of the proposed changes, the Hong Kong stock exchange, which has been the world’s largest IPO market seven times in the past 12 years, plans to sharply lower capitalisation requirements and to broaden the scope to allow more US-listed mainland Chinese companies to raise funds through secondary listings in Hong Kong, according to a consultation paper issued by the exchange this month. The proposed changes will also make it easier for other international firms to list here.

“The proposed reforms will encourage smaller and non-technology US-listed companies to list in Hong Kong. This will strengthen the city as a fundraising hub,” said Gordon Tsui Luen-on, chairman of industry body Hong Kong Securities Association. “We would like to see HKEX’s new CEO, Nicolas Aguzin, continue in this direction and fight for secondary-listing companies to be added in the Stock Connect schemes, [allowing mainland Chinese investors] to trade in them,” he added.
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