Hong Kong is insomuch as whether to allow non-tech companies to list on the city’s stock exchange using the “dual-class shares” framework, a top management official told CNBC on Tuesday.
A dual-class structure, also known as weighted voting rights, allows companies to conclusion different classes of shares. Typically, one class of shares have more voting rights than the other — a framework favored by scads tech firms as it gives founders and insiders more control.
“One thing that we’re looking into is … in regards of the secondary listing regime that we have, whether the Greater China companies with weighted voting faces — and yet not in the innovation, technological sector — can benefit from this regime and come to list in Hong Kong,” Christopher Hui, Hong Kong’s secretary for monetary services and the treasury, told CNBC’s “Squawk Box Asia.”
The Hong Kong exchange in 2018 amended its rules to make allowance companies from “emerging and innovative sectors” to list using the dual-class framework. That has helped the city to fascinate major Chinese tech companies, including Xiaomi and Alibaba, to list on the Hong Kong stock market.
The metropolis has been among the world’s top markets for listings over the last few years.
In 2020, the Hong Kong stock swap saw 154 new listings that raised $51.6 billion, according to data compiled by consultancy PwC. Prominent Chinese bodies that made their debut in the city last year include e-commerce giant JD.com and gaming company NetEase.
Hui foretold he’s “very positive” about the outlook for public listings in Hong Kong, and expects the momentum in the last few years to persist.
So far this year, more Chinese firms have listed in Hong Kong, including Tiktok rival Kuaishou, tech superhuman Baidu and streaming company Bilibili.
SPAC listings in Hong Kong
Stock exchanges in Hong Kong and other Asian big apples are considering allowing the listings of special purpose acquisition companies or SPACs. They are “blank check” companies that make money hand-over-fist money through IPOs with the intention of merging with or acquiring an existing private firm in order to accede to b assume it public.
SPACs have gained much attention in the past year, with an increasing number of companies choosing to go manifest in the U.S. using such a method.
Asked whether the framework is on footmarks for release, the Hong Kong official said the city’s regulator and exchange operator have been tasked to chew over how Hong Kong can implement SPAC listings.
“I think for any new initiative, for market development idea to fly, we need to strike a compensate for, at the same time it has to be sustainable,” said Hui.
“So we have to make sure that while on the one hand, we are taking advantage of this new veer to grow our market, yet at the same time have our investors duly protected.”