Mak­ing HK-based IPOs avail­able to China in­vestors will be per­fect cat­a­lyst, says CEO

New Straits Times - - Business - HONG KONG

HONG KONG Ex­changes and Clear­ing Ltd’s (HKeX) bid to win Saudi Ara­bian Oil Co’s (Aramco) list­ing would get a boost from hav­ing a pri­mary con­nect trad­ing sys­tem with main­land China, ac­cord­ing to its chief ex­ec­u­tive of­fi­cer (CEO).

HKeX has so far cre­ated three links with do­mes­tic Chi­nese mar­kets, and CEO Charles Li has plans for sev­eral oth­ers.

The pri­mary con­nect, which would see shares in ini­tial pub­lic of­fer­ings (IPO), here, made avail­able to main­land in­vestors, would act as a lure to ma­jor com­pa­nies, he said.

“For Saudi Aramco to con­sider list­ing in Hong Kong, just a pure Hong Kong list­ing would prob­a­bly not be com­pelling,” said Li.

To be able to list in the city and sell shares into ma­jor Chi­nese in­sti­tu­tions would be the “per­fect cat­a­lyst” for pri­mary con­nect, he said.

Saudi Ara­bia aims to sell about five per cent of Aramco in an IPO next year, and stock ex­changes from the United King­dom to Ja­pan are vy­ing for what may be the world’s rich­est pub­lic de­but.

The main con­tenders are bourses in Lon­don, New York, Hong Kong, Tokyo, Sin­ga­pore and Toronto.

Pri­mary con­nect is the “next big thing”, said Li, though he added that it “will take a while”.

The ex­change op­er­a­tor’s shares fell as much as 5.4 per cent yes­ter­day morn­ing, its big­gest in­tra­day drop in more than a year.

HKeX posted sec­ond-quar­ter prof­its of HK$1.78 bil­lion (RM986.7 mil­lion) on Wed­nes­day, a 14 per cent in­crease from HK$1.55 bil­lion a year ear­lier.

Rev­enue for the quar­ter was HK$2.76 bil­lion, said the com­pany, com­pared with HK$2.73 bil­lion pre­vi­ously.

Li said in an earn­ings con­fer­ence on Wed­nes­day that there wasn’t a timetable for new links be­tween Hong Kong and the main­land.

As well as pri­mary con­nect, other sug­gested sys­tems would in­clude ex­change-traded funds and de­riv­a­tives.


Hong Kong Ex­changes and Clear­ing Ltd chief ex­ec­u­tive of­fi­cer Charles Li says pri­mary con­nect is ‘the next big thing’, al­though it ‘will take a while’ to hap­pen.

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