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Friday, June 05, 2020, 18:07
Li: Mainland firms to make beeline for HK second listing
By Pamela Lin
Friday, June 05, 2020, 18:07 By Pamela Lin

HONG KONG - Many Chinese mainland companies listed overseas will seek a Hong Kong listing this year, partly due to US political pressure they have been facing since the national security legislation for Hong Kong was proposed, the CEO of the Hong Kong Stock Exchange said.

“This is going to be a big year for initial public offerings, including both huge IPOs from the mainland, but very substantial returnees, what we call them, from the United States,” Charles Li Xiaojiao said in a webinar on Thursday.

A primary or secondary listing in Hong Kong would allow those companies to get closer to their main customer base

Charles Li, HKEX CEO

US-traded Chinese mainland companies now face an unfriendly climate in New York City. In stark contrast, the doors of the Hong Kong Stock Exchange have opened wider with the introduction of listing-rule reforms more than two years ago, Li said.

READ MORE: HK's global IPO crown will be difficult to sustain in 2020

He said that many Chinese companies listed in the US did so because they could not qualify to list on the Hong Kong Stock Exchange, and some such companies still do not qualify to list in Hong Kong. “But all of the great companies that we know that are coming back, they are qualified already, especially technology firms,” Li added.

A primary or secondary listing in Hong Kong would allow those companies to get closer to their main customer base, he said.

Nasdaq-listed China's online games maker NetEase started to take investors' orders in Hong Kong on Tuesday for its secondary listing. It is the first US-listed Chinese firm to launch a secondary listing in the city this year.

Another US-listed Chinese e-commerce giant, JD.com, which is seeking a Hong Kong secondary listing, passed the listing hearing Friday. The company could raise at least US$2 billion, Bloomberg News reported.

According to monthly data from Hong Kong Stock Exchange, total funds raised for the first five months of this year was HK$134.5 billion (US$17.35 billion), an increase of 27 percent compared with the HK$105.7 billion for the same period last year.

In addition, the average daily turnover in May went up 18 percent year on year. The market capitalization was HK$34 trillion at the end of May, an increase of 10 percent from HK$31 trillion for the same period last year.

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