Jake's View | Don't change listing rules until lawyers have to change theirs
Some people just don't know when they are well off. In my view, one of the strongest arguments for banning distorted voting rights in listed companies is that it helps keep those wretched IT companies off our market.
Besides Alibaba, the exchange paper showed it lags the US in getting information technology firms to list here. At the end of May, a third of the 102 mainland companies listed in the US [had] dual-class share structures and 70 per cent of them [were] IT companies. In Hong Kong only 6 per cent of newly listed companies from January 2010 to December 2013 were IT firms.
Some people just don't know when they are well off. In my view, one of the strongest arguments for banning distorted voting rights in listed companies is that it helps keep those wretched IT companies off our market.
Yes, I know that some of them have been spectacular winners. But for every Apple Corp there are a hundred sinkhole stocks in information technology. Let the venture capitalists have them, I say.
For the ordinary investor and for the reputation of the stock market nothing beats boring companies that do boring things. They make you money. IT loses you money. Don't believe me? Welcome to poverty.
And let's get it straight about Alibaba, too. The Hong Kong exchange was actually willing to listen to the plea that its founders be given preferential voting rights but insisted they would have to feel at least some of the pain of their smaller shareholders if things went wrong. You've got to put some skin in the game, said the listing committee.
