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Hong Kong stock exchange operator HKEX launches digital IPO platform FINI as listings drop to two-decade low

  • FINI will shorten the settlement cycle to two days from five, and enhance the competitiveness of Hong Kong’s capital markets
  • Analysts say the new platform, along with the incentive of reduced stamp duties on stock market transactions, could help lift market sentiment

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The logo of Hong Kong Stock Exchange (HKEX) is seen outside the HKEX in Central. Photo: Yik Yeung-man
Mia CastagnoneandEnoch Yiu
The Hong Kong Exchanges and Clearing (HKEX) launched a new digital platform for initial public offerings (IPO) on Wednesday, with an eye on breathing life into the city’s moribund primary market by speeding up settlements and reducing investor risks on a bourse where IPO listings are at a two-decade low.
The “Fast Interface for New Issuance” (FINI) will shorten the settlement cycle to two days from five, by modernising and digitalising Hong Kong’s IPO settlement process.

Analysts said the new platform will hasten the listing process and enhance the competitiveness of Hong Kong’s capital markets, bringing it on par with other listing venues. The shorter and compact window for offering, pricing and listing will result in lower risks for issuers and investors, and facilitate an IPO even in volatile markets.

“HKEX’s FINI will materially shorten the settlement risks during the IPO process, while it will also put Hong Kong more at par with its global peers,” said John Lee Chen-kwok, vice-chairman and co-head of Asia country coverage at UBS global banking.

Hong Kong Exchange Square in Central. Photo: Xiaomei Chen
Hong Kong Exchange Square in Central. Photo: Xiaomei Chen

Global macroeconomic uncertainties and high interest rates have led to a slowdown in IPO listings across the world. Hong Kong has so far seen a total of 61 companies listed, raising HK$41.3 billion (US$5.3 billion), as of November 17, according to EY. The number of deals dropped 19 per cent while proceeds from the offerings fell 59 per cent year-on-year, hitting a level last seen 20 years ago.

“We believe the launch of FINI will help instil a greater sense of optimism in the Hong Kong IPO market,” said Melody Ngan, our Co-head of ECM for APAC at Deutsche Bank.

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