Hong Kong bourse counts on listing reforms to boost market in coming year after decline in IPO fundraising in 2021
- Effective January 1, HKEX will allow SPACs, widen the pool of overseas companies that qualify for listing, and increase the profit threshold for new listings
- CEO Nicolas Aguzin promised to promote Hong Kong as a capital fundraising centre, and to enhance its role as a connector between mainland China and the world
With three new listing policies coming into effect this week, bourse operator Hong Kong Exchanges and Clearing (HKEX) is confident of a stronger outlook in the next year, even after 2021 saw a decline in initial public offerings, according to analysts.
Effective January 1, Asia’s third largest stock market will allow listings of so-called blank cheque companies, widen the pool of overseas companies that qualify for listing, and increase profit thresholds for new listings.
In the first initiative of reforms undertaken by new chief executive Nicolas Aguzin, HKEX will allow special purpose acquisition companies (SPACs), also known as blank cheque companies, to list, joining global bourses from New York to Singapore in opening another fundraising avenue for start-ups.
“Listing activity is likely to rise in early 2022, driven by the new SPAC regime,” said Victoria Lloyd, a partner in Baker McKenzie’s capital markets practice. “In fact, we note a number of investment banks and promoters are already looking to be among the first to launch SPACs in the first half of 2022.”