Li bullish on next year's IPOs

Business | Avery Chen and Reuters 7 Nov 2018

Charles Li Xiaojia, chief executive of Hong Kong Exchanges and Clearing (0388), expects the local IPO market to remain strong next year, and says he is not worried about the new board for technology in Shanghai.

Li said more than 250 companies intend to go public in Hong Kong next year, many of which are technology and biotechnology companies. However, if the Primary Equity Connect is not implemented it will be difficult to attract overseas companies to list in Hong Kong, he said in an interview with foreign media.

The new science and innovation board on the Shanghai Stock Exchange will launch a trial of the registration system, the investment threshold will refer to China-UK Stock Connect, mainland media reported.

Li said the registration system reform will reduce the impact on the secondary offerings. The experiment in the science and technology companies can help achieve support for the policy. In addition, it can also clearly indicate to the market the dual risks of the registration system and the issuance of innovative companies.

Li also said the firm will acquire a technology company in the mid-term to develop blockchain applications and upgrade trading systems. Meanwhile, global index provider MSCI expects a quadrupling of the weighting of mainland stocks in its global benchmarks by 2019 could draw more than US$80 billion (HK$624 billion) of new foreign investment into the world's second largest economy.

In September, MSCI proposed to increase the weighting of Chinese large cap securities to 20 percent from the current 5 percent in two steps, in May 2019 and August 2019.

In other news, mainland property management service provider Xinchengyue (1755) closed at HK$3.01 on its market debut, 3.8 percent higher than its IPO price of HK$2.90.

Also, Hon Corporation (8259) priced its initial public offering at HK$0.50, the lower end of its indicative range of HK$0.50 to HK$0.60, while the retail tranche was 22.53 times oversubscribed.

The Singapore-based building and infrastructure contractor expects to raise HK$31.4 million and list in the growth enterprise market today.

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