Outgoing Hong Kong bourse chairman regrets 2014 loss of Alibaba mega listing
Chow Chung-kong, who steps down after six years, sees bright future for exchange as China set to develop into the world’s largest economy
The outgoing chairman of the Hong Kong stock market operator said his biggest regret during his six-year tenure was the failure to land the initial public share offering in 2014 of Chinese e-commerce giant Alibaba Group Holding.
Chow Chung-kong, who stepped down as chairman of Hong Kong Exchanges and Clearing (HKEX) at its annual shareholders meeting on Wednesday, said he hoped that reforms to listing rules announced this week would bring big tech firms like Alibaba to the city’s market.
“Alibaba is a good company. It was a regret during my term to see HKEX lose Alibaba. I hope the listing reform announced on Tuesday will bring eight or 10 companies like Alibaba to list in Hong Kong,” Chow said at his last media briefing after the AGM.
Alibaba decided to list in the US rather than Hong Kong, where its dual-class share structure was not accepted under rules at the time. The loss of the listing – worth US$25 billion – was met with disappointment in Hong Kong and was the spark for the debate over listing rules.
In what it billed as the biggest listing reform to the exchange in 25 years, HKEX said on Tuesday that from next week it would allow companies with dual-class share structures to list. Such structures are favoured by many tech firms because they allow founders and key managers to keep control even if they hold only minority stakes.
Chow said that he would count the listing reform as among his three major achievements, alongside HKEX’s takeover of the London Metal Exchange in 2012 and the setting up of the two Stock Connect schemes with the Shanghai and Shenzhen exchanges that allowed cross-border trading of Hong Kong and mainland China equities.
“HKEX has developed from a local stock market to a global exchange with multiple asset classes,” Chow said.
The exchange’s benchmark Hang Seng Index closed on Wednesday at 30,328.15, up more than 30 per cent from the 20,677.16 when Chow took office on April 24, 2012. Its market capitalisation has also risen more than 70 per cent in the period to over HK$34 trillion (US$4.3 trillion). Market turnover in the first quarter of this year stood at HK$146.1 billion, compared with average daily turnover of HK$53.9 billion in 2012.
HKEX’s new board of directors will elect a new chairman at their first meeting on Thursday. The Financial Services Development Council’s chairwoman, Laura Cha Shih May-lung, a former vice-chair of market regulator the Securities and Futures Commission, is widely expected to succeed Chow.
“What I can say is the overall outlook is positive for the new chairman. As China is going to become the world’s largest economy, it will need a world class financial centre and Hong Kong has the conditions to play such a role,” he said.
Alibaba owns the South China Morning Post.