Hong Kong exchange to enhance role as go-to listing venue for mainland firms
Published: Mar 29, 2022 07:19 PM
Pedestrians pass by the office of HKEX in Hong Kong. File photo: VCG

Pedestrians pass by the office of HKEX in Hong Kong. File photo: VCG

Hong Kong Exchanges and Clearing (HKEX), the operator of Hong Kong's stock exchange, is aiming to consolidate its role as an offshore fundraising hub for Chinese mainland companies amid mounting uncertainties in overseas markets, senior executives said on Tuesday during HKEX's 2022 Corporate Day.

In response to a question from the Global Times, officials also downplayed concerns that a flurry of pending IPOs might limit the Hong Kong bourse's capacity to welcome more homecoming listings of US-listed Chinese firms amid the US regulatory crackdown.

The bourse operator would enhance connect programs between Chinese mainland and Hong Kong exchanges this year with the addition of exchange-traded funds, Mao Zhirong, head of mainland development at the HKEX, said at the event via video link.

In the medium term - 2023-24 - the HKEX plans to enhance the listing regime for Chinese issuers, Mao said, adding that the operator will grow its portfolio's China-related product offerings beginning in 2025.

Speaking of the market's role as a super connector bridging the mainland and global markets, HKEX Chief Executive Officer Nicolas Aguzin said that "our main strategic strength is to be the most international market of China and the most Chinese market outside the mainland."

This unique position has given HKEX extraordinary relevance and vitality in the past decade, Aguzin said, noting that "we believe the strength will continue to define our future."

During a media briefing after the event, Aguzin said that the rising number of A1 filings over the past few months testifies to the market's robustness. There are 170 active A1 filings at present, Aguzin revealed.

A1 filings refer to applications for an IPO on the Hong Kong main board, as opposed to submissions of Form 5A for a listing on the Hong Kong Growth Enterprise Market.

The latest example is Ximalaya, which submitted its A1 Form on Tuesday, as the domestic online radio-sharing platform aims to get listed on the main board.

Amid the flood of filings for such listings, some have expressed concern that this might influence the exchange's role as a new home for overseas-listed mainland companies.

Responding to the question from the Global Times, Bonnie Y Chan, head of listing at HKEX, said that the exchange wasn't concerned with the pileup of A1 filings, and rather, HKEX was pleased to welcome this intense interest.

The bourse operator has revised its listing regime to facilitate secondary listings of US-traded Chinese firms, she noted, adding that dual primary listings on the Hong Kong exchange offer China concept stocks an expedited conduit for their homecoming, which makes them eligible for inclusion in the stock linkups between the mainland and Hong Kong markets.