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In a consultation paper released late Wednesday, Hong Kong Exchanges & Clearing Ltd. proposed broadening secondary listings to all companies from now limiting them to high growth and innovative firms as long as they have one vote per share. It wants to lower the minimum market capitalization to HK$3 billion ($386 million), given a listing track record of five years. That’s down from HK$40 billion, or HK$10 billion with revenue of HK$1 billion.
The move is intended to add further momentum to a boom in listings by Chinese firms in the city amid rising tension with the U.S. New York-listed Chinese tech heavyweights such as Alibaba (NYSE:BABA) Group Holding Ltd., Baidu Inc (NASDAQ:BIDU). and Bilibili (NASDAQ:BILI) Inc. have raised $36 billion through secondary listings in Hong Kong since late 2019.
“Our latest proposals to streamline requirements and enhance our listing regime will attract more international and mainland companies looking to benefit from Hong Kong’s liquid financial markets,” Bonnie Chan, HKEX’s head of listing, said in a statement. The plan will maintain “the quality of the market” and “the high standards of shareholder protection that Hong Kong is known for,” she said.
The proposal came as China is said to mull creating a new stock exchange to attract overseas-listed firms to come back home, Reuters reported on Wednesday.
The new rule could allow the likes of retailer Miniso Group Holding Ltd., developer Nam Tai Property Inc. and pet products maker Boqii Holding Ltd. to add listings closer to home.
Market participants have until May 31 to respond to the consultation.
©2021 Bloomberg L.P.
