Global investors worried about HK - but none has walked yet, says Li

Top News | Stella Zhai and Bloomberg 17 Jul 2019

The head of Hong Kong Exchanges & Clearing, Charles Li Xiaojia, says neither violence nor a crackdown should offer a picture of Hong Kong to the world.

After attending an initial public offering ceremony, Li said many international investors have expressed worries over the recent extradition bill protests, adding that fortunately no one has walked out of the Hong Kong market yet.

Peace, freedom, openness, tolerance and rationality are characteristics that Hong Kong boasts about. They are terms that appear on the city's name card.

People are proud of these characteristics, but not crackdown and violence, he said, calling on Hongkongers to rationally express their opinions.

Li believes that the central government will stick to "Hong Kong people administering Hong Kong."

The key point for the city's IPO market is to assure international investors they should not worry and continue investing in Hong Kong. Li said he will make sure investors won't vote with their feet, and Hong Kong will continue to attract more companies with its name card.

In spite of the disappointing Budweiser IPO postponement, he believed Hong Kong's operation mechanism is sound, and issuers and investors will make their best choices.

Li is confident in the IPO market, expecting the second half to be strong and robust. He respected the decision of the Budweiser maker, Anheuser-Busch InBev, to shelve its IPO plan.

The exchange is studying the feasibility of shortening the five-day gap between the IPO pricing date and the listing date for retail investors, said Li. This reform will allow retail investors to subscribe to the IPO shares by only a promise without real payment, giving them the same time period to allocate their funds as the institutional investors.

Li added that the mechanism has no impact on the issuer, and the Hong Kong Stock Exchange will take both kinds of investors' needs into consideration.

Broker Bright Smart pointed out that the postponed IPO had locked up at least HK$38 billion in public subscription, and may have caused loss of interest worth two-to-three percent of the amount, which was unfair to subscribers using margin financing.

JPMorgan Chase and Morgan Stanley, the top two advisers on Anheuser-Busch InBev's Asia Pacific unit IPO, would have lost up to US$140 million (HK$1.09 billion) to US$170 million in fees, according to people with knowledge of the matter.

The world's biggest brewer intended to raise as much as US$9.8 billion before it announced last Friday that it wouldn't proceed with the listing, citing "prevailing market conditions."

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