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Hong Kong eases listing thresholds for tech firms, SPAC deals in fresh tonic for IPO market

  • Modifications to Chapter 18C and SPAC requirements will only apply for three years from September 1 to address changing market conditions: HKEX

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Investors at a forum at HKEX’s head office in Central. Photo: Edmond So
Enoch Yiu
Hong Kong’s stock exchange operator is modifying its listing rules to make it easier for specialist technology companies and special-purpose acquisition companies (SPACs) to raise funds from investors, after a rebound in capital-market activities led to record earnings.

Hong Kong Exchanges and Clearing (HKEX) will lower the minimum threshold for yet-to-be profitable technology companies to sell shares through initial public offerings (IPOs), according to a joint statement with the Securities and Futures Commission (SFC). The transaction threshold for listing through SPACs will also be lowered, it added.

The “temporary modifications” will take effect for only three years, starting from September 1, it said. The city’s financial market regulator is supporting both measures, according to the statement.

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“We have identified opportunities to boost the inclusivity and dynamism of our listing environment within the established framework,” said Katherine Ng, HKEX’s head of listing. “These modifications will provide greater flexibility and clarity for both issuers and investors.”

Katherine Ng, HKEX’s head of listing (left) with other key executives during Black Sesame’s IPO ceremony in August 2024. Photo: Jonathan Wong
Katherine Ng, HKEX’s head of listing (left) with other key executives during Black Sesame’s IPO ceremony in August 2024. Photo: Jonathan Wong
The move will be a much-needed tonic for the city’s stock market, which has fallen on hard times since the social unrest in 2019 and the Covid-19 pandemic in the ensuing three years. Once the top venue for global IPOs, Hong Kong slipped to 13th this year. A revival since March helped HKEX produce its best-ever second-quarter earnings.
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The bourse operator introduced some new guidelines in its listing rules in March last year, known as Chapter 18C, to speed up the IPOs of tech firms without the usual profit track records. Since then, only Tencent-backed artificial intelligence drug researcher QuantumPharm and Chinese chip maker Black Sesame have listed via this path on the Main Board.

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