‘Father of red chips’ backs new board to attract unicorns, but not new start-ups
HKEX has ended its consultation for the third board that comprises two platforms: one which allows for dual-class share structure and open to all investors, and the other for start-ups where only professional investors can invest in
The Chamber of Hong Kong Listed Companies chairman, Francis Leung Pak-to, also known as “father of red chips” said on Monday that the chamber supported the Hong Kong stock exchange’s proposed separate board to list dual class share companies here, but not new start-ups.
The HKEX has just ended a consultation last Friday for the third board’s establishment, whose listing requirements differ from the main board and the Growth Enterprise Market, essentially aimed at providing a listing venue for technology companies.
The new board will have two platforms: a premium market that is open to all investors and will host companies that are eligible to list on the main board, but have a dual-class share structure which the exchange currently disallows. The second is for start-ups where only professional investors can invest in.
Leung was opposed to the start-up board for the high risks that entailed. “Many start-ups lack track records and have a high risk of failure. They are not suitable to be traded on the stock exchange,” he said.
He supported however, the launch of a separate board only for the dual class shares with a market capitalisation of HK$8 billion, which is similar to a so-called unicorn new economy firm valued at US$1 billion.
“There are plenty of mainland “unicorns” which would be interested to list in Hong Kong, but our market needs to prepare itself for these companies. This is why we would need this new board that accept dual class share companies to list,” he said.