LettersHow Hong Kong’s stock exchange can become the leader of the pack

Our local bourse has been playing catch-up with its international peers for too long

A new set of listing rules to attract carbon-neutral companies or new energy vehicle manufacturers might be worth considering

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An electronic board displays the Hang Seng Index on November 5 at Exchange Square, the building housing Hong Kong stock market. Photo: EPA-EFE

Published: 7:45am, 20 Dec 2021

With various shocks and crises, whether man-made or natural, piling up against the local stock exchange, one wonders if the Hong Kong stock exchange is really up to the task of seizing opportunities in the midst of adversity.

The Covid-19 pandemic has been ravaging the stock markets for nearly two years now, and on top of that the United States is looking to further tighten regulations for US-listed Chinese companies. Such firms are expected to delist and come to Hong Kong instead.

However the local bourse has for years been in reactive mode and playing catch-up with its international peers. Examples of such measures include finally allowing dual-class share listings in 2018, almost five years after Alibaba went to New York to list following its rejection by Hong Kong, and amendments to the listing rules to permit start-up biotech firms to list locally.

Only recently has the stock exchange concluded a public consultation on special purpose acquisition companies. Meanwhile, everybody else has been piling into “blank cheque” listings for two years.

To be sure, the local bourse has always been rigorous in protecting local investors. Other stock exchanges such as New York prefer a lighter regulatory regime for listed firms, with investors being more responsible for their investment choices. There, if things go wrong, there is always the lawyer to consult.

However, such a seemingly well-intentioned approach might be holding Hong Kong back when grasping opportunities in the face of crises such as US-China rivalry and climate change.