Since the beginning of 2020, if stock exchanges around the world also have hot search rankingsHong Kong Exchanges and ClearingMaybe number one.
The boom in Hong Kong's capital markets contrasts with the sudden cooling of the global economy. As the Foreign Company Accountability Act of the United States refers to Chinese stocks, Chinese stocks that have been listed in the United States have shown a "wave of returning to Hong Kong".NetEase和JingDongIn the second listing one after another in June, Ant recently released plans to list at the same time in Science and Technology Innovation Board and Hong Kong Exchanges and Clearing.
For a moment, Hong Kong Exchanges and Clearing was all good news.
However, the protagonists behind these "glamorous" seem to be mainland new economy companies. Mainland Chinese companies have accounted for more than 50 per cent of Hong Kong-listed companies so far after Hong Kong Exchanges and Clearing introduced well-known institutional reforms such as different rights of the same shares, secondary listings and allowing biotech companies with no income to list in Hong Kong.
As an international exchange group that clearly proposes to gain a foothold in China and connect with the world, Hong Kong Exchanges and Clearing's vision will certainly not be limited to Chinese companies, what kind of international ambitions does it have? And how to be unique in an increasingly competitive environment? What kind of olive branch will it extend to the emerging market unicorn in Southeast Asia?
Bao Haijie, Managing Director of Hong Kong Exchanges and Clearing and head of Global listing Services, recently accepted36氪An exclusive interview with Hong Kong Exchanges and Clearing on how to attract global IPO.
De-"Facebook" Chinese stocks
Q: what do you think?Lucky、A good futureAnd other Chinese companies were exposed to financial fraud in the United States, causing a "wave of return to Hong Kong" of Chinese stocks. Will Hong Kong Exchanges and Clearing strengthen the examination of Chinese stocks?
A: first of all, the enlightenment we get from the "China Stock crisis" is that no matter which capital market an enterprise chooses to be listed, as a public company, it needs to abide by the regulatory standards of its market in compliance and information disclosure, operate in good faith according to the highest standards, and win the trust and recognition of investors.
In fact, every capital market, whether in the United States, China or Europe, can see some cases of fraud and other risk problems from time to time. This is a market phenomenon, we cannot put this hat on all Chinese stocks and make this problem face-to-face.
This matter needs to be seen in a big context, the audit mechanism of each market is matched with its stage of development, regulatory punishment mechanism and investor groups. Take the United States as an example, it is a very mature market, dominated by institutional investors, so it adopts the registration system, and the listing review is relatively loose compared with Asian exchanges, but it has a set of severe punishment mechanism, including the class action system. Once there are big problems in listed companies, they can have perfect legal means to trace back, and even ask for high compensation.
When considering how to avoid the risk of financial fraud, the exchange cannot rely solely on the more stringent audit stage to pick out the "bad fruit". Even if it is a good fruit at the time of listing, it may later become a "bad fruit".
On the whole, Hong Kong's capital market system is still relatively mature, with its independent and strict regulatory system and legal system. We examine all companies in accordance with the requirements of the listing rules and treat them equally. No matter how the company is listed in Hong Kong, the company must fully comply with the regulatory requirements of the listing rules, otherwise it will pay a heavy price.
Q: how do you compare the differences between American and Asian stock exchanges? For mainland new economy companies, is there any more advantageous one?
A: I think in fact, when the New economy Company chooses to list on the stock market, it is likeOrdinary peopleWhen considering buying a house, you should consider all kinds of factors, such as school district, supermarket, commuter, etc., each has its own advantages and disadvantages. It is the same for enterprises to go public. Without One market fits for all, each company should make appropriate choices according to its own needs and characteristics. For example, whether the listing audit system is clear and transparent, whether there is a convenient and fast way of refinancing after listing, the composition of investors, the activity and liquidity of the market, the cost of issuance and so on, this is a very complex evaluation system.
The choice of Hong Kong Exchanges and Clearing by mainland new economy companies undoubtedly proves the unique attractiveness of Hong Kong's regulatory system, investor composition and market operation efficiency.
Q: with Science and Technology Innovation Board andGemWith the launch of the new economy, new economy companies have chosen more places to list. What do you think of the competition between the mainland exchanges and Hong Kong Exchanges and Clearing, which is often mentioned? In addition to attracting more international capital, what are the other characteristics of Hong Kong Exchanges and Clearing?
A: I think Hong Kong Exchanges and Clearing and the mainland stock exchanges have a symbiotic and co-prosperous relationship. It is not a relationship of "how to grow bright". It supports the rapid and sustainable development of enterprises through an efficient capital market. The big goal is the same.
The Hong Kong market is already a very mature and high-speed operating system: in the listing stage, the listing rules are clear, and the listing process and timetable of qualified enterprises are highly deterministic. After listing, issuers and investors recognize the high degree of openness of the market and the flow of funds in and out at any time. In terms of refinancing, issuers can choose flexibly and achieve rapid financing through diversified financing tools.
These advantages can continue to support companies listed in Hong Kong to obtain sustained, efficient and cost-effective capital replenishment.
Southeast Asian unicorn company may become a "new customer"
Q: in addition to mainland new economy companies, Hong Kong Exchanges and Clearing also intends to attract emerging market companies to list in Hong Kong in recent years. Southeast Asia as a geographically close market favored by the majority of investors, the number of unicorns is also considerable. What is Hong Kong Exchanges and Clearing's strategy and measures to attract Southeast Asian companies to list in Hong Kong?
A: I think the development stage of Southeast Asia is indeed not exactly the same as that of China. It is an earlier period compared with China. Under the ascendant tide of the Internet, the growth momentum and potential are still very obvious. From the perspective of long-term development, the population structure is younger and the younger generation is growing rapidly, which is a prominent advantage.
There is no doubt that the maturity of the market is increasing, including the popularity of labor, technology and the Internet.
As for those who can meet the listing conditions to list in Hong Kong, they may be relatively mature industries or companies. Attracting Southeast Asian companies to list in Hong Kong can enrich the types of listed companies in the Hong Kong market and enhance our international attractivity. we very much welcome these companies to list in Hong Kong. In addition to traditional industries, we very much welcome new economy companies from emerging markets to go public.
In the future, we will increase our listing promotion activities in Southeast Asia to help Southeast Asian enterprises understand the system and characteristics of Hong Kong's capital market.
Apart from attracting Southeast Asian companies to list in Hong Kong, we also have some other measures to enrich Southeast Asian products in the Hong Kong market. For example, in May this year, Hong Kong Exchanges and Clearing signed a licensing agreement with MSCI to launch 37 MSCI Asian and emerging market futures and options contracts in Hong Kong. Many of these stock index futures are linked to options of listed companies in Southeast Asian countries, which is also a big step forward in Hong Kong Exchanges and Clearing's international strategy.
Q: although Hong Kong Exchanges and Clearing welcomes Southeast Asian new economy companies to list in Hong Kong, there are actually many options for listing companies such as Gojek and Tokopedia, such as the New York Stock Exchange,NASDAQWait. Hong Kong Exchanges and Clearing in attracting these Southeast Asian companies to list, in addition to the geographical proximity, compared with these exchanges, where are the other attractive places? If these companies succeed in listing in Hong Kong Exchanges and Clearing, apart from bringing more international elements to Hong Kong Exchanges and Clearing, what is the other significance?
A: Hong Kong has always been a highly international market. It has attracted many international companies over the years, such as Budweiser and Budweiser, who listed in Hong Kong last year.ESR. Next, we very much hope that Southeast Asian unicorn companies with the conditions for listing will fully consider the unique advantages brought by listing in Hong Kong when choosing places for overseas listing.
First of all, as a platform for communication between issuers and investors, the exchange provides the function of price discovery. for issuers, choosing which market often means choosing what kind of investors. for example, whether the investors in a certain market are suitable for the arrangement of the issuer's long-term capital plan. The proportion of international investors in the Hong Kong market is more than half. For Southeast Asian unicorns, IPO in Hong Kong means docking with international investors directly in the Asian time zone.
In addition, the number and proportion of Chinese investors in the Hong Kong market are also increasing. In the past few years, China's investment in Southeast Asia has been increasing, ranking first in the world in terms of investment volume in Southeast Asia, and some Chinese market investors have taken into account both the primary market and the secondary market. If Southeast Asian unicorns are listed in Hong Kong, they will have extensive contact with Chinese investors who are more familiar with them.
Another important factor that companies will consider when going public is whether there are any comparable companies in the listing place, their valuation and pricing, and their performance in the market. After the development of Hong Kong Exchanges and Clearing in recent years, the IPO financing of New economy Company has accounted for more than half of the whole market. With the increasing proportion of new economy companies in the Hong Kong market, it is easier for Southeast Asian unicorns to find comparable companies in the Hong Kong market, and these comparable companies are very popular with investors in Hong Kong's capital markets. their valuations and liquidity are constantly rising.
In addition, the business model of Southeast Asian Unicorn has many similarities with China's new economy enterprises. Due to the similar geographical location, social environment and industry profile, Southeast Asian unicorn companies are easier to be familiar with and understood by investors in the Hong Kong market.
Q: in addition to the secondary listing of Chinese stocks in Hong Kong, what are the arrangements for other companies from overseas markets, such as Internet companies from Southeast Asia, to list in Hong Kong Exchanges and Clearing?
A: secondary listing is actually a relatively special arrangement. Issuers of US-listed Chinese stocks can choose between secondary listing and dual listing. For the more mature and large-scale Chinese stocks, the secondary listing is usually their choice at this stage, which not only retains the listing status in the United States, but also expands the range of investors through Hong Kong listing, reducing the risk of future financing and listing.
For many Southeast Asian companies, if they are already listed in the United States, NASDAQ and NYSE actually fall within the scope of our approved exchanges. However, if it is listed on a local exchange, there may be some local exchanges that are not currently on the list of recognized exchanges, and companies need to consider other paths such as dual major listings.
Companies interested in making a second listing in Hong Kong should first assess their current situation, consider the applicability of different listing paths, and then determine which path is more suitable for them. We also encourage potential issuers to maintain communication with Hong Kong Exchanges and Clearing's listing review department, confirm as soon as possible whether the company meets the basic conditions for secondary listing, and make comprehensive considerations according to the company's own situation and changes in the external environment, in order to determine the best time and method of listing.
Do a good job of "bridge"
Q: last year was Hong Kong Exchanges and Clearing's "big year". With a total amount of HK $315.5 billion raised, he ranked first in the global IPO (initial public offering) and won the championship for the sixth time in a decade. How to review last year's achievements and what are the prospects for this year's IPO market?
A: Hong Kong Exchanges and Clearing's IPO performance in the past decade has been very outstanding, mainly due to several factors, on the one hand, external factors, mainly due to the rapid development of China's economy and the continuous release of dividends from reform and opening up. To some extent, Hong Kong Exchanges and Clearing provides a channel and bridge for these fast-growing companies to go public.
In 2019, the number of unicorns in China has surpassed that of the United States. while becoming the second largest economy in the world, science and technology has become the main engine of China's economic growth, and new economy enterprises have made great contributions.
From 2000 to 2010, most of Hong Kong Exchanges and Clearing's listed companies were large state-owned enterprises and financial institutions; in the past decade, there has been a continuous increase in the number of new economy companies that have come to raise funds, especially in the past two or three years. New economy companies have accounted for more than half of the listed financing.
From the perspective of internal causes, as a converter between China and the world, the Hong Kong market continues to give full play to its inherent advantages and keep pace with the times. Hong Kong Exchanges and Clearing launched reform measures on biotechnology, different rights of the same shares and secondary listing in 2018, which now appears to be very successful. At the beginning of this year, the epidemic slowed the progress of the entire IPO, but Hong Kong Exchanges and Clearing still achieved remarkable results, with the total amount of funds raised in the first half of the year rising 22% year-on-year to HK $87.5 billion. From the plate point of view, TMT, health care market performance is very good, the financing of the primary market has been welcomed by many investors.
Judging from the schedule of listing applications, the project schedule of listed companies in Hong Kong is still very healthy. by the end of June 2020, a total of 123 companies have submitted listing applications, including TMT (science and technology, media and communications), biotechnology,Large consumptionThe leading company in the field that investors are very concerned about. Overall, we remain cautiously optimistic about the IPO market in the second half of the year.
(Li Yufei @ 36 Krypton / tr. by Phil Newell)
Editor | Zhao Xiaochun @ 36 Krypton out to sea
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