Hong Kong builds new springboard to top global IPO league with Saudi Aramco approach, tech listing reforms

Bourse operator is setting up offices in New York and Europe to reach global prospects and recently approached Saudi Aramco to list in Hong Kong

New set of listing reforms will entice companies with cutting-edge technology in cloud computing, artificial intelligence and semiconductors, UBS banker says

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An electronic board outside the HKEX headquarters in Central, Hong Kong. Photo: Yik Yeung-man

Published: 2:00pm, 31 Oct 2022Updated: 2:21pm, 31 Oct 2022

Hong Kong is sparing no effort to regain its position as the top go-to venue for global stock offerings, including pursuing the potential listing of Saudi Aramco and easing track-record rules for companies with cutting-edge technology.

Bourse operator Hong Kong Exchanges and Clearing (HKEX), which is setting up offices in New York and Europe to support the aim, recently reached out to Saudi Arabia’s state oil company, according to Financial Secretary Paul Chan Mo-po. HKEX is separately seeking feedback about easing profit requirements for firms with hi-tech appeal, such as artificial intelligence, cloud computing and semiconductors.

If successful, it would add gloss to recent signs of rebound in the city’s initial public offering (IPO) market, albeit from domestic giants. China Tourism Group Duty Free, the world’s biggest duty-free retailer, completed its US$2.1 billion deal in August, the city’s biggest IPO this year to help elevate Hong Kong’s global IPO ranking last quarter.

“Many big tech companies could not qualify for listing in Hong Kong as they could not match the current profit or revenue requirements,” said John Lee Chen-kwok, vice-chairman and head of Greater China global banking at UBS. “The proposed reforms will allow many potential candidates in cloud computing, AI and semiconductor manufacturing to list here.”

John Lee Chen-Kwok, vice-chairman and head of Greater China global banking of UBS, seen in a May 2022 picture in Central, Hong Kong. Photo: Dickson Lee

The city’s main board was ranked the fourth most-active IPO market in September by registering HK$69 billion (US$8.8 billion) of proceeds, versus 10th place in June, according to data compiled by Refinitiv. In the biotech industry, Hong Kong has enabled 53 listings through October, trailing only the Nasdaq in New York.

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