China's top securities regulator yesterday reiterated it would support Chinese firms looking to list overseas as some mainland enterprises scrapped listing plans in Hong Kong amid weak market sentiment.
Speaking at a forum, vice-chairman Fang Xinghai said the China Securities Regulatory Commission will improve the overseas listing system for Chinese firms and encourage various enterprises to have initial public offerings abroad in accordance with the law.
Fang added that CSRC proposes to include more companies listed in the mainland in the Stock Connect, which connects the Hong Kong, Shanghai and Shenzhen stock exchanges.
However, several Chinese biotech firms have scrapped their Hong Kong IPO plans and are listing in the mainland instead, including drug maker TransThera Sciences and medical equipment manufacturer Insight Lifetech, in a bid to seek higher valuations amid weak market sentiment in Hong Kong.
The Hang Seng Hong Kong-Listed Biotech Index has plunged 30.83 percent to 1,145 points so far this year.
EY's Asia-Pacific IPO leader Ringo Choi Wai-wing said investors are less interested in purchasing shares of newly listed firms, as around two-thirds of IPOs have seen their shares sink below the offer prices on their debut in Hong Kong this year, while new listings in the mainland have enjoyed a relatively better performance.
But Hong Kong will remain attractive for mainland firms planning to expand overseas as the city holds an edge in global funding, he said.
Fang Xinghai was a key speaker at Hong Kong’s global investment summit last week. AP
