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
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.
Hong Kong is getting a helping hand from market regulators in mainland China to grease the wheel. The China Securities Regulatory Commission (CSRC) in September said it would allow global firms listed in the city to join the Stock Connect scheme, widening their investor base to mainland Chinese funds.
UK insurer Prudential sees great opportunities from its listing in Hong Kong over the past 12 years. The Shenzhen Stock Exchange recently added the insurer to its list of eligible stocks in the Stock Connect trading scheme in September, according to an official statement.
“Hong Kong is a major international financial centre and an important market for Prudential,” James Turner, group chief financial officer, said in an email to the Post. “The city has proximity to the Greater Bay Area which provides access to investors from mainland China.”
Prudential initiated a dual-primary listing in Hong Kong in 2010. It conducted a stock placement in September last year to raise HK$18.5 billion to help repay older debt and fund its expansion. Given its focus on Asia, Prudential is seeking to boost its investor base in the region and the liquidity of its shares, Turner added.
“Combined with the active and sophisticated investors that we have in Hong Kong, the new chapter is expected to help Hong Kong maintain position as a competitive market and a top choice of listing venue for issuers,” said Virginia Lee, a partner at the legal firm Clifford Chance.
More than 140 candidates have filed their applications, even as the Hang Seng Index has taken a big beating this year amid an exodus of global funds. Many are waiting for a turnaround in sentiment to launch with their listing plans, HKEX has said. With a strong IPO pipeline, UBS’s Lee said Hong Kong can regain its top spot in the global IPO market.
“The global market sentiment also counts” as the dry spell in the IPO market hit every market from Hong Kong to New York and Europe for a variety of reasons, he added. “The outlook for Hong Kong IPO markets will depend on the China macroeconomic development and its zero-Covid policy.”