Mainland unicorns eyed for IPO boost
CE: High visibility, market valuation of startups will attract investors globally
Hong Kong Chief Executive John Lee Ka-chiu on Tuesday said the special administrative region government aims to attract Chinese mainland unicorns — startups valued at over $1 billion — for their initial public offerings in Hong Kong, in a bid to revitalize the city’s capital markets.
In his address before the weekly Executive Council meeting, Lee said that the SAR government will continue to promote Hong Kong’s advantages globally, especially the support measures recently issued by the China Securities Regulatory Commission, which are set to boost connectivity between the capital markets in Hong Kong and the mainland.
On Friday, the mainland securities regulator unveiled five measures, encompassing expanding the eligible product scope of equity exchange-traded funds under the Shanghai-Hong Kong Stock Connect and the Shenzhen-Hong Kong Stock Connect, incorporating real estate investment trusts to the two stock-connect programs and enhancing the arrangements for mutual recognition of funds.
The commission also said it will encourage more leading mainland enterprises to list in Hong Kong.
The central authorities’ support of Hong Kong’s financial markets has been welcomed by the city’s administration and industries, with discussions underway with mainland authorities about the measures’ implementation, Lee said.
The measures will bring substantial help to the city by attracting more investment and capital from the mainland and overseas, he said.
Lee revealed that Hong Kong Exchanges and Clearing is reviewing nearly 100 listing applications, including some from high-valueadded industries such as fintech and artificial intelligence.
He said the government is reaching out to top-tier mainland unicorn enterprises, encouraging them to raise funds in the SAR.
“These enterprises have high visibility and market valuation, and therefore their listing in Hong Kong will attract the attention and participation of investors around the world,” Lee said.
Since 2014, the mainland authorities have issued a series of initiatives to build the Hong Kongmainland mutual market access program, allowing cross-border investment in Hong Kong and mainland markets. They include the Shanghai-Hong Kong Stock Connect, launched in 2014, and the Shenzhen-Hong Kong Stock Connect in 2016. So far, the program covers the markets of stocks, bonds, interest rate swaps, wealth management products, and block trading.
This year marks the 10th anniversary of the Stock Connect program. Lee said the government and Hong Kong Exchanges and Clearing are planning a series of key promotional activities to showcase the program’s success and the investment opportunities it has created.
Lee said the government will step up efforts to help mainland investors learn the program’s updates and enhance their interest in investing in Hong Kong’s stock market.
The SAR government will maintain close communication with the central authorities and strive for more national policies to benefit Hong Kong, Lee said.