Revised listing rules to boost Hong Kong market


The Stock Exchange of Hong Kong Ltd, a wholly owned subsidiary of Hong Kong Exchanges and Clearing Ltd (HKEX), announced last week the exchange’s revised listing regime.

SHANGHAI: With secondary listing regulations revised in Hong Kong, the local stock market will be more dynamic and the city’s role as a key financing venue will be further consolidated, market experts say.

The Stock Exchange of Hong Kong Ltd, a wholly owned subsidiary of Hong Kong Exchanges and Clearing Ltd (HKEX), announced last week the exchange’s revised listing regime.

For Chinese issuers without a weighted voting rights (WVR) structure, those non-innovative ones will be allowed for secondary listings after the revised regime takes effect next year.

The minimum market cap will also be lowered. Chinese issuers without a WVR structure can seek a secondary offering if their market cap reaches US$3bil (RM12.56bil) or they can demonstrate a track record of good regulatory compliance of at least five financial years on a qualifying exchange such as the Nasdaq.

For those with a market cap of US$10bil (RM41.89bil), the compliance period will be shortened to two full financial years.

At present, such secondary applicants to the Hong Kong exchange must see their respective market cap reach US$40bil (RM167.58bil) at the time of listing. If not, a minimum market cap of at least US$10bil (RM41.89bil) combined with a minimum US$1bil (RM4.18bil) in revenue for the most recent audited financial year can suffice.

The revised listing regime also said that Chinese issuers primarily listed on a qualifying exchange before Dec 15, 2017, and overseas Chinese issuers eligible for a secondary listing with their WVR and/or variable interest entity structures, the latter of which is widely adopted by Chinese technology companies, may opt for a dual primary listing on the exchange.

The amended listing rules will take effect from Jan 1. “This new framework will support a whole new generation of international and regional issuers seeking a listing in Hong Kong. It will help facilitate orderly and efficient listing,” said Bonnie Y Chan, head of listings at HKEX. ― China Daily/ANN

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