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Enoch Yiu

Hong Kong needs to diversify the source of its listed companies and investors if it is to reclaim its recently lost crown as the world’s top initial public offering (IPO) venue, according to a government think tank.
“Hong Kong should continue to find ways to diversify both its listing issuers as well as potential future investors,” said Benjamin Hung Pi-cheng, chairman of the Financial Services Development Council (FSDC), at a media briefing on Wednesday. “That form of diversification enhances the quality rather than [simply] focusing on quantity.”
The comments came as Hong Kong Exchanges and Clearing’s main board, the world’s largest IPO market last year and in the first quarter, lost its crown to Nasdaq following Elon Musk’s SpaceX blockbuster listing, which raised US$75 billion last month.
Hung said the city could still attract a lot of new economy companies to list, and could regain ground by drawing issuers from across Asean, the Middle East and Europe.
“Hong Kong could attract these international companies to list here as it is the only market where they can attract mainland Chinese investors via the Stock Connect scheme,” Hung said.

More than 90 per cent of IPOs in Hong Kong in recent years had come from mainland firms, according to LSEG Data & Analytics.
Daniel Fung, vice-chairman of the FSDC, said many mining companies across the Association of Southeast Asian Nations traditionally listed in London or Toronto, but geopolitical tensions could prompt them to consider Hong Kong, which offered stability and growth opportunities.
Hung added he did not believe Beijing’s crackdown on illegal cross-border trading would hurt Hong Kong’s capital market development.
In May, the China Securities Regulatory Commission fined three brokerage firms – Tiger Brokers, Futu Securities International and Longbridge Securities – more than US$330 million for offering mainland investors access to overseas stocks without a licence.
Hong Kong regulators quickly responded by tightening controls. The Securities and Futures Commission required licensed brokerages to ensure no falsified documents were used in account openings, while the Hong Kong Monetary Authority instructed banks to require mainland customers opening investment accounts to declare their funds originated outside China.
“Chinese wealth has also accumulated significantly. There is a clear benefit and need to diversify, and Hong Kong is that platform,” Hung said. “The question really is whether that diversification is through proper channels or improper channels.”
Amy Lo Choi-wan, chairman of UBS Global Wealth Management Asia and CEO of UBS Hong Kong, said the local wealth industry supported the measures.
“The industry in general supports measures to direct all cross-border capital flow into regulated licensed channels,” said Lo, who is also an FSDC board member, at the briefing.
The industry has proposed expanding the cross-border Wealth Management Connect scheme by adding products and quotas, to provide more channels for mainland investors to put money into Hong Kong.
“If these proposals can be implemented, we will see continuous capital flow to Hong Kong,” Lo said.
The FSDC, set up in 2013, is tasked to find ways to strengthen Hong Kong’s role as an international financial centre. Since its inception, it has made 275 policy recommendations to the government, 73 per cent of which have been adopted.


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Will diversification restore Hong Kong’s IPO title? Think tank maps out plan

.css-1c6uqr6{color:inherit;font-weight:inherit;font-size:inherit;font-family:inherit;line-height:inherit;overflow-wrap:break-word;}City can regain ground by attracting new economy companies and issuers from across Asean, Middle East and Europe, FSDC says

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