New Hong Kong IPO regime draws no day-one listing applications, but eased rules will lure tech start-ups, analysts say
- ‘Given the uncertainty in the current global financial market, we may not see an immediate rush of listings under the new regime’, Baker McKenzie lawyer says
- The new listing regime may help Hong Kong regain the coveted top spot among global IPO venues, says a Deloitte analyst
Hong Kong Exchanges and Clearing (HKEX), the operator of Asia’s third-largest bourse, received no listing applications on Friday as new, less onerous qualification rules took effect, but experts believe the new regime will attract technology start-ups within the next few months.
“Given the uncertainty in the current global financial market, we may not see an immediate rush of listings under the new regime,” said Victoria Lloyd, partner at law firm Baker McKenzie’s capital market practice.
But eventually the new rules will not only “open more doors to companies with great potential to list in Hong Kong”, but also “broaden Hong Kong’s capital base”, Lloyd said.
HKEX on Friday added Chapter 18C to its listing rules, allowing companies with at least HK$10 billion (US$1.3 billion) in valuation to sell shares in initial public offerings (IPOs), even if they have yet to earn a single dollar in sales. The threshold will be reduced to HK$6 billion if they have at least HK$250 million in sales in the financial year before their IPOs.
The exchange’s previous rules, among the most stringent in the world, required at least HK$80 million in combined profit in the three years preceding a new listing.
HSBC, the biggest lender in Europe and Hong Kong, will help tech companies to raise funds in Hong Kong if they wish to do so, CEO Noel Quinn said during a media briefing in Hong Kong on Thursday.