A Hong Kong party headed by a top government adviser suggested establishing an “IPO Connect” scheme to deepen interconnectivity and augment the attractiveness of listing in Hong Kong for foreign enterprises.

The Hong Kong New People’s Party (NPP), led by Regina Ip Lau Suk-yee, convenor of the non-official members of the Executive Council of the Hong Kong Special Administrative Region, suggested that the SAR government should pursue the central government’s support for the implementation of such a scheme.

Currently, the Hong Kong Stock Exchange operates Stock Connect, a mutual market access program that allows investors from the Chinese mainland and Hong Kong to invest in stocks and exchange-traded funds (ETFs) in each other’s markets. However, this program does not include IPO transactions.

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In its 2025 Policy Address recommendations, the party proposed establishing an “IPO Connect” scheme to meet the demand in cross-border IPO transactions. Additionally, the scheme would enhance the appeal of listing in Hong Kong for foreign enterprises, fostering a more integrated and competitive financial market.

In the initial stage, Chinese mainland investors would subscribe to Hong Kong's IPOs through designated financial institutions. This requirement would ensure that their investment gains could be returned to their Chinese mainland accounts.

At the same time, imposing a limited quota for mainland investors should be considered, to mitigate any risks associated with the "IPO Connect". For instance, participation could be limited to IPOs that raise HK$1 billion ($128 million) or more, and a subscription ratio limit could be imposed for Chinese mainland investors, such as 20 percent of the total offering volume.

This year, Chinese mainland companies have been fueling a new wave of IPOs in Hong Kong. In the first seven months, a total of 10 A-share companies were listed in Hong Kong, raising over HK$88.6 billion, accounting for nearly 70 percent of the total IPO fundraising in the Hong Kong stock market during the same period.

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The NPP expects that more companies from the Chinese mainland will consider listing in Hong Kong. They believe that expanding the mutual market access mechanism to include IPO subscriptions would provide fresh impetus to both the Chinese mainland and Hong Kong securities markets.

Meanwhile, the scheme would also enhance the appeal of listing in Hong Kong for foreign enterprises, as they could also attract mainland capital and leverage the listing as a gateway into the mainland market. This underscores Hong Kong’s role as a bridge between the Chinese mainland and the rest of the world, the NPP said.

A case in point is the listing of Jiaxin International Resources Investment on Thursday. The company, which operates a tungsten mining operation in Kazakhstan, is the world’s first dual listing on the Hong Kong Stock Exchange and the Astana International Exchange (AIX) in Kazakhstan.

Secretary for Financial Services and the Treasury Bureau Christopher Hui Ching-yu said that Jiaxin’s dual listing in Hong Kong and Kazakhstan highlights the international diversity of the Hong Kong stock market.

In addition, Jiaxin adopted renminbi-denominated new share financing on the AIX, pioneering this approach in Central Asia.

Contact the writer at thor_wu@chinadailyhk.com