Hong Kong exchange’s biggest reform in 8 years opens gates to more IPOs
HKEX will allow universal confidential listings and reduce market-capitalisation thresholds for IPOs by start-ups and international firms
Stock exchange operator Hong Kong Exchanges and Clearing (HKEX) will allow all listing applications to remain confidential and will reduce market-capitalisation requirements for listings by start-ups and international firms immediately, it announced on Friday.
The exchange will also reduce the market-cap requirements for weighted voting right (WVR) companies to HK$20 billion (US$2.6 billion), from HK$40 billion currently. It will also lower the thresholds for a company using the revenue test to HK$6 billion in market capitalisation and HK$600 million in revenue in the most recent financial year, compared with HK$10 billion in market cap and HK$1 billion in revenue now.
While some respondents in a consultation process requested lower thresholds, HKEX said most respondents agreed with the chosen reductions, and the proposal in March was in line with the levels in Shanghai and Shenzhen. The exchange received 73 responses during the consultation from March to May.
The market cap requirement for overseas-listed innovative companies launching secondary listings in Hong Kong will also be lowered to HK$6 billion from HK$10 billion.
The reforms aim to attract more innovative companies from around the world to list in Hong Kong.