As US-listed mainland companies face an
increasingly unfriendly climate in New York, Hong Kong can become a magnet to
attract promising mainland firms to seek listings here, says the local bourse's
chief executive.
Charles Li Xiaojia, chief executive of Hong Kong Exchanges and Clearing Ltd (HKEX), said in a recent interview with Fortune that Hong Kong will open its doors wider to mainland companies who leave the US stock market.
As relations between the US and China have fallen to new lows in the wake of the coronavirus outbreak, he believes Hong Kong will develop further as a “bridge” and “connector” between the world’s two largest economies
But this does not mean the Hong Kong
stock exchange, Asia's third-largest in terms
of market capitalization, will lower its standards and allow in any
“bad apples”, Li stressed.
As relations between the US and
China have fallen to new lows in the wake of the coronavirus outbreak, he
believes Hong Kong will develop further as a “bridge” and “connector” between
the world’s two largest economies.
“From a relative perspective of importance,
(Hong Kong) will probably become more important,” said Li.
With the mainland and Hong Kong making
positive efforts to reopen more quickly than Western countries, "the
global economic recovery will likely stem from Asia", Li noted.
There will be a fresh spate of IPOs from
mainland enterprises as the world's second-largest economy takes the lead in
returning to normal, he predicted.
Mainland e-commerce giant JD is reportedly
seeking a second listing that could raise up to $3 billion in Hong Kong as
early as June.
The long-anticipated Hong Kong listing by
the Nasdaq-listed behemoth may become a much-needed confidence boost for
the city at such a difficult time - like its New York-listed rival Alibaba’s
$13 billion blockbuster debut in Hong Kong in November at the height of the
city’s violent protests.
By the end of last year, out of the total
2,449 listed companies in Hong Kong, some 50.7 percent or 1,241 were from
the mainland. They contributed to a staggering 73.3 percent of total
market capitalization and 82.5 percent of total market turnover, data from
HKEX shows.
In early May, Li said he would not seek reappointment after tenure of more than a decade. His contract ends in October 2021.
