Exclusive | Change the rules and they will come: Tech firms are knocking on Hong Kong’s doors to raise capital

Technology companies are knocking on the Hong Kong stock exchange’s doors, making inquiries about raising capital under new listing rules, in a sign that the biggest overhaul of regulations by the bourse in three decades may be showing the desired effect.

More than 10 companies involved in e-commerce, online payments and biotechnology, mostly based in mainland China, have sought out information from Hong Kong Exchanges & Clearing (HKEX), according to the bourse operator’s chairman Chow Chung Kong.

“These companies are asking for more information about our newly announced listing reforms, including the chance to list here under a dual-class shareholding structure,” Chow said in an interview with the South China Morning Post, without identifying any of them. “None of them have made a formal application, but they are interested to know more about our proposed rule changes.”

The flurry of interest, less than a fortnight after the HKEX unveiled its regulation change, appears to be a tentative, though preliminary, vindication of the push by the exchange to reinvent itself to compete with New York, Shanghai, Tokyo and Singapore for the global crown in initial public offerings (IPOs).

Hong Kong will finish 2017 in third place in the global IPO stakes, with the funds raised falling 45 per cent to US$13.87 billion, the lowest since 2012, according to Thomson Reuters data.

New York took the crown this year, with the capital raised more than doubling to US$29 billion, helped by blockbuster listings like the US$3.9 billion IPO by Snap Inc, which operates the social media service Snapchat.