White Collar | Hong Kong doesn't need sequels to the GEM flop
Unlike London, new boards tailor-made for diverse investors and firms may not work in city
A top government think tank has suggested Hong Kong follow London in introducing new boards for companies with different shareholding structures.
However, a similar idea has not worked in the past. The experience with the 15-year-old Growth Enterprise Market should warn us not to make the same mistake twice.
The Financial Services Development Council recently recommended Hong Kong introduce boards tailor-made for the needs of diverse investors and firms, which would help attract listings by companies of the likes of mainland e-commerce giant Alibaba and British conglomerate Jardine Matheson.
The idea is that if Britain can do it, so can Hong Kong.
But one should note that only professional investors may trade on the London Stock Exchange's AIM submarket and they know how to protect themselves.
Hong Kong has a tradition of allowing retail investors to trade everything from gold to stocks and warrants. It would be hard to introduce a board from which they would be excluded.
Not many companies require a special shareholding structure. Any "special shareholding board" would likely have only a few firms listed on it.