Close to 80 percent of new listings saw their share prices rise or remain flat in their Hong Kong debut since the bourse implemented measures to optimize the initial public offering market, said Secretary for Financial Services and the Treasury Christopher Hui Ching-yu.
That compared to around 70 percent before the optimization launched in August, Hui said in a written reply to lawmakers.
Of the 109 IPOs between August and April, nearly 90 percent adopted the no-clawback mechanism with a fixed allocation of at least 10 percent to the retail tranche, compared to just two cases that opted for the other mechanism that allows retail investors to subscribe for up to 35 percent of the total IPO shares, depending on the oversubscription rate, Hui said, adding that there were also 12 specialist technology companies taking on the bespoke mechanism.
He said the proportion of institutional investors in market trading has risen significantly in recent years, as compared with the 1990s when the clawback mechanism was introduced, and the Hong Kong Exchanges and Clearing (0388) has taken into account the needs of different investors in implementing the measures.
The new mechanism strikes a reasonable balance between ensuring meaningful participation by price-setting investors in IPOs and maintaining retail investor involvement, including ensuring a bookbuilding placing tranche of a meaningful size that helps enhance price discovery to benefit all investors participating in IPOs, Hui stressed.
𝗗𝗼𝘄𝗻𝗹𝗼𝗮𝗱 𝗧𝗵𝗲 𝗦𝘁𝗮𝗻𝗱𝗮𝗿𝗱 𝗔𝗽𝗽 ↓
