Hong Kong perfectly placed to attract US-listed Chinese companies after market reforms, Paul Chan says

HKEX has cut the listing valuation threshold for US- or UK-listed companies to HK$3 billion (US$384.77 million), from HK$40 billion previously

HKMA and PBOC are studying cross-border use of e-yuan, while Hong Kong is studying the feasibility of an e-HKD

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Hong Kong’s finance chief Paul Chan painted a rosy picture about the outlook of the city’s stock market. Photo: Reuters

Published: 6:29pm, 11 Jan 2022

Hong Kong is ready for US-listed mainland Chinese companies in case they decide to seek a listing in the city following the latest regulatory reforms, according to Financial Secretary Paul Chan Mo-po.

The development of the Greater Bay Area, green financing and the Chinese central bank’s digital currency will enhance the appeal of the city’s capital market, he added.

The finance chief painted an upbeat picture about the prospects of the city’s capital market despite the imminent threat of a fifth wave of Covid-19, even as funds raised from the stock market shrank 17 per cent last year, the first decline since 2017.

“With mainland companies seeking to grow and still hoping to explore international financing in the face of increasing regulatory uncertainty in the US, it is likely that we will see more China concept stocks return from the overseas market,” Chan said in a speech to the 15th Asian Financial Forum on Tuesday. “We are actively making preparations for that.”

Hong Kong’s Financial Secretary Paul Chan said the reforms initiated by the city’s stock exchange will boost its competitiveness in attracting new listings. Photo: Martin Chan

In December, the US moved a step closer to delist Chinese companies from American exchanges. The Securities and Exchange Commission said it would start to identify non-compliant foreign companies under a new law enacted last year that will require them to open their books to US scrutiny. Companies risk being kicked off the New York Stock Exchange and Nasdaq if they fail to comply with the rules for three years until 2023.

Meanwhile, new rules put in place by bourse operator Hong Kong Exchanges and Clearing (HKEX) from January 1 allow companies with a minimum valuation of HK$3 billion (US$384.77 million) that have been trading in the US or the UK to launch a secondary listing, a drastic reduction from the previous minimum threshold of HK$40 billion. US-listed companies not involved in the innovation sector can also apply for a listing in the city.

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