Hong Kong weighs easing listing rules for large tech firms

[HONG KONG] Hong Kong is considering easing some listing requirements for large, advanced technology firms that are currently not eligible in an effort to help them meet capital needs for research and development, according to the city's top financial official.

The Securities and Futures Commission (SFC) and Hong Kong Exchanges & Clearing are reviewing the Main Board listing rules and examine to revise them to meet the fundraising needs of "large-scale advanced technology enterprises," Hong Kong's Financial Secretary Paul Chan said in his annual budget speech Wednesday (Feb 23).

Hong Kong is no longer in the top 3 listing venues globally as a widening crackdown by China on a vast range of industries hit investor sentiment and share prices. Initial public offerings (IPO) in the Asian financial hub raised US$43 billion in 2021, behind both the Nasdaq and New York Stock Exchange as well as Shanghai, data compiled by Bloomberg show.

It marks a drop in ranking from the first half, when the city came third with US$31 billion. Shanghai has since pulled ahead, with US$58 billion raised in 2021, the data shows. Hong Kong was among the top 3 IPO exchanges worldwide in 2020 after grabbing the top spot in 2019 and 2018.

Chan also said a working group formed by HKEX, SFC and the Hong Kong Monetary Authority - the de facto central bank - has completed its feasibility study on allowing yuan-denominated stocks to be traded via the southbound Stock Connect. They will start discussion with mainland Chinese authorities and the Hong Kong government is prepared to support the scheme with measures such as waiving stamp duty on stock transfers paid by market makers to boost liquidity. BLOOMBERG