Wall Street cheers Hong Kong’s IPO rules revamp but sees New York’s dominance unthreatened
Hong Kong is transforming its bourse’s rules to compete with the US – and has caught the attention of Xiaomi. But how worried should Wall Street be of losing China’s biggest companies?
The Hong Kong stock exchange is making its biggest push in decades to attract Chinese tech companies. But Wall Street is not fazed.
Last year the city fell from the top and slid behind New York and Shanghai in overall dollar volume raised through initial public offerings.
In an effort to regain supremacy, the bourse said in December it would relax rules to allow controversial dual-class share listings and let young biotech firms list before they turn profitable.
Capital markets professionals on Wall Street agree that the proposed changes, once they take effect, are likely to make Hong Kong more competitive.
But these are not earth-shattering alterations, given their availability on bourses globally for years.
“Hong Kong is largely matching what other Exchanges currently permit,” said Gregg Noel, head of the West Coast capital markets practice at law firm Skadden Arps Slate Meagher & Flom LLP, which has advised hundreds of IPOs globally, including Chinese online retailer JD.com’s 2014 IPO on Nasdaq.