Chinese market regulator CSRC’s support will divert scores of mainland firms’ IPOs to Hong Kong, analysts say

Some mainland companies with strong fundraising needs may opt to transition their listing plans to Hong Kong, according to Deloitte’s Edward Au

Central government is asking mainland’s leading companies to prioritise Hong Kong as their overseas listing venue, UBS banker says

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China’s market watchdog has initiated moves to boost the fortunes of the Hong Kong stock exchange. Photo: Mia Castagnone

Published: 7:00am, 23 Apr 2024

A number of mainland Chinese firms are expected to shift their fundraising plans to Hong Kong following the recent tightening of domestic listing rules and measures by the mainland’s market regulator to support initial public offerings in the city, according to analysts.

“The backing of Hong Kong as a listing hub for major industry players from mainland China underscores the importance of leveraging the city’s international capital market for their fundraising activities,” said Edward Au, southern region managing partner at Deloitte China, adding that this will “solidify Hong Kong’s position as a premier destination for listings”.

He said some mainland companies with strong fundraising needs to expand their businesses or those seeking a swifter fundraising process may opt to transition their listing plans to Hong Kong.

The China Securities Regulatory Commission (CSRC) on Friday announced it would facilitate listings in Hong Kong by the mainland’s industry-leading companies as well as expand the Stock Connect cross-border investment scheme.

This was preceded by the issuance of several documents last month to tighten the scrutiny of new domestic stock offerings on the Shanghai and Shenzhen stock exchanges, as the regulator vowed to investigate financial fraud and falsified statements and raise the bar for IPOs by companies with profit track records.