CENTRAL: Hong Kong Exchanges and Clearing Limited (HKEX) has approved the biggest change to its initial public offering policy in two decades, to compete for technology and biotech firms’ listings versus the U.S. and mainland China.
The proposed new rules will become effective April 30 when the Hong Kong Exchange will start accepting applications, the exchange announced late Tuesday. It is expected that the first batch of high-tech companies will be listed as soon as June.
The rules add three new chapters to the Main Board Listing Rules to permit listings of biotech companies that do not meet the Main Board’s financial eligibility tests, the listings of companies with weighted voting right (WVR) structures, and to establish a new concessionary secondary listing route for Greater China and international companies that want a secondary listing in Hong Kong.Due to the strict listing rules in Hong Kong, more than 6,000 Chinese firms have turned to China’s “New Third Board,” an over-the-counter exchange for small and medium companies, or NASDAQ and New York Exchange over the past decade. For example, China’s largest retailer Alibaba Group, with a market cap of US$452.3 billion, could not list in Hong Kong due to its voting rights structure.
