Hangzhou, Suzhou companies looking to go public in SAR

Many firms in Hangzhou and Suzhou in eastern China have started or considered a listing in Hong Kong, said Financial Secretary Paul Chan Mo-po, as Beijing signaled support for mainland giants to go public in the city together with four other stimuli.

After a visit to the two rich mainland cities last week, Chan wrote on his blog that enterprises which eye an initial public offering in the SAR aim to take advantage of Hong Kong's strength and the seamless link to global standards.

These Yangtze Delta-based companies believe overseas financing via Hong Kong can speed up their development in domestic and global markets, Chan added.

It comes after China's securities regulator announced five measures to deepen cooperation with Hong Kong's capital market, ranging from IPOs to stock trading to funds.

In the past year, 72 Chinese enterprises completed applications for IPOs in Hong Kong, according to the China Securities Regulatory Commission.

It said it will communicate more with related authorities to support eligible mainland industry leaders going public in Hong Kong.

Chan believes these new measures will benefit Hong Kong's IPO market and attract more international funds to the city.

In the first quarter, the Hong Kong stock exchange dropped to 10th in the global ranking for new listings amid a sluggish market, but it may rebound to the top five with HK$100 billion estimated to be raised this year.

The Hong Kong government has been striving to attract tech companies. Chinese battery giant CATL has announced that it will set up its global headquarters and a research and development center at the Hong Kong Science and Technology Park amid talk it will list in the SAR to raise US$6 billion (HK$46.8 billion) at most.

CSRC also plans to include more stock exchange-traded funds to the Connect Schemes which link the investors in Hong Kong and the mainland, in which the required average ETF asset management size will be lowered. The expansion aims to support Hong Kong's development as an international asset-management center.

Eligible real estate investment trusts in the mainland and Hong Kong will be added to the Connect Schemes. The yuan counter in the Southbound Connect will be further improved by facilitating yuan internationalization.

The fifth stimulus from the CSRC is the optimization of mutually recognized funds. Limits on sale proportion outside the home market will be eased and overseas institutes will be allowed to manage eligible funds in Hong Kong.

themis.qi@singtaonewscorp.com