Update | Hong Kong stocks advance to record close on optimism city will return to IPO glory in 2018
New rule allowing dual-class shares to be listed is seen making city the most attractive destination for IPOs once more
Hong Kong’s benchmark stock index rose 1.8 per cent to close at a historical high, on optimism the city’s stock exchange will see a flurry of initial public offerings from June that will help it regain its crown as the world’s favourite destination for raising capital.
The Hang Seng Index rose to close at 31,904.75, surpassing the record previously set on October 30, 2007. Advances were led by banks, property stocks, and a 19.8 per cent increase this year in the stock price of the Hong Kong Exchanges & Clearing Limited, the bourse operator. The HSI is now also only 53 points from reaching an intraday record high.
The record close came after HKEX chief executive Charles Li Xiaojia unveiled a reform to listing rules that will allow large biotechnology companies without revenue and other new-economy firms to apply to list their dual-class shares in Hong Kong from the end of June.
“There will be some big names coming in for IPO in Hong Kong, so the market has more momentum,” said Stanley Chan, director of research at Emperor Securities.
The Hang Seng China Enterprises Index climbed 2.54 per cent, or 316.86 points, to 12,787.28.