Hong Kong government backs plan for new tech board, says minister
The Hong Kong government supports plans by the city’s stock exchange to launch a new platform to attract technology and new economy companies to list, according to a minister.
“Attracting high quality companies to list in Hong Kong is important to the future development of the Hong Kong capital market,” Chan Ka Keung, Hong Kong’s Secretary for Financial Services and the Treasury, said on Wednesday.
“We support the stock exchange in its plans to review local listing rules and to launch a new platform to attract more technology or new economy companies. The Securities and Futures Commission and Hong Kong Exchanges and Clearing will work together to study these issues,” Chan told media after he hosted the opening ceremony at the exchange to mark the first trading day of Year of the Rooster.
HKEX chief executive Charles Li Xiaojia said last month the local bourse would this year conduct a consultation to launch a third board, with more relaxed regulations than the main board and the Growth Enterprise Market, to attract technology and new economy companies to list in the city.
Hong Kong is the world’s largest initial public offering market worldwide based on total funds raised in the past two years. However, the listings are heavily biased towards financial firms, which accounted for 69 per cent of funds raised last year, while tech firms accounted for only 3 per cent, according to a report by consulting firm PwC.
SFC chairman Carlson Tong Ka-shing said at Wednesday’s exchange ceremony that the SFC would jointly work with the HKEX to study the project. In 2015 the commission rejected the exchange’s proposal to allow dual class shareholding companies to list in Hong Kong on the grounds that such structures did not offer sufficient shareholder protection. Many new economy companies such as Facebook and Google use dual class structures which allow a class of shareholders, usually the founders, to have more rights than other shareholders. The US allows such structures but Hong Kong has banned them since the 1980s.