Zhixin Finance has learned that on June 17th, Charles Li, CEO of Hong Kong Stock Exchange (00388), said that the Hong Kong new share market is facing only cyclical problems, and the core competitiveness is still there. The number of new stock listings is expected to increase significantly in the third quarter. The effect of the China Securities Regulatory Commission encouraging leading companies to come to Hong Kong in April was immediate, and some investment banks are dealing with more than 20 IPO applications or preliminary work.

Charles Li revealed that funds of various types have been flowing into Hong Kong stocks recently, and even foreign investors who claimed (the Chinese market) was not investable two quarters ago have increased their holdings.

Hong Kong stocks have been weak for the past two years, and it has been a long time since an IPO with a fundraising amount of more than $1 billion has been seen. Charles Li said that the recent new stock offerings have been small in scale, and companies' fundraising methods and timing need to take into account commercial interests, but among the companies expressing their intent to list in Hong Kong, there are no shortage of high-valuation companies, to whom flexibility should be given.

Charles Li pointed out that the market has improved recently, and he has been talking to some investment banks. Even if they are still said to be in a wait-and-see mode, they are beginning to do homework to find appropriate entry points. Just a quarter or two ago, they may not have been willing to listen.

Charles Li also pointed out that Saudi Arabian companies coming to Hong Kong for IPOs or companies going to Saudi Arabia for IPOs are just around the corner. Recently, several companies listed in Hong Kong have been able to see movements of Middle Eastern investors. At the end of last year, Abu Dhabi state-owned assets increased their holdings in NIO by $2.2 billion, increasing their stake from 7% to 20.1%; last month, the Saudi Arabian sovereign wealth fund subscribed to $2 billion of Lenovo Group convertible bonds, which are rare billion-dollar deals in the Hong Kong stock market in recent times.

Charles Li said that the Middle East is very interested in Mainland assets and has begun to take action, rather than just exploring. The next step from bilateral trading to public market trading is just around the corner.

At the exchange level, Charles Li said that after making Saudi Arabia an approved exchange to facilitate secondary listings in Hong Kong, the Saudi market ETF that was listed last year is warming up the market and increasing market awareness of companies in the Middle East. Last month, it held a capital market forum with the Saudi Stock Exchange, facilitating about 300 bilateral meetings. Many of them require industry operators, in addition to (financial) infrastructure.

In addition to the Middle Eastern market, Charles Li pointed out that following the inclusion of the Indonesian stock exchange in the list of approved stock exchanges last year, the exchange is preparing to add exchanges in Southeast Asia, and everyone will know when it is ready.