HSBC's Peter Wong proposes an IPO Connect scheme within GBA

Peter Wong Tung-shun, chairman of the Hongkong and Shanghai Banking Corporation, has proposed introducing an IPO Connect scheme to allow mutual access to new shares within the Greater Bay Area.

Wong, also a member of the National Committee of the Chinese People's Political Consultative Conference, suggested the new mechanism should cover A+H listed companies in the initial phase, allowing mainland investors to subscribe to A-share listed companies’ new shares issued in Hong Kong and granting Hong Kong and overseas investors access to new share subscriptions when Hong Kong-listed firms seek to float in Shenzhen. 

The scope could be expanded to include companies seeking listing with a market capitalization of more than 5 billion yuan (HK$5.7 billion) or HK$5 billion in the future, Wong said.

Funds under the scheme for initial public offerings should be managed in a closed-loop, he said, adding that mainland investors should be allowed to subscribe to new H-shares with both the Hong Kong dollar and the offshore yuan, while Hong Kong and overseas investors could use the yuan for A-share IPOs.

Given that IPO subscriptions are not routine trading activities, he believes there is no need to impose a daily trading quota.