HK bourse warns investors on virus
HONG KONG: Hong Kong’ stock exchange has told companies looking to list in Asia’s biggest IPO centre to disclose the impact of the coronavirus on their businesses and detail plans to mitigate the effects, three sources with direct knowledge of the matter said.
Three sources told Reuters the stock exchange, operated by Hong Kong Exchanges and Clearing ( HKEX), has asked five specific questions of companies looking to go public.
Eighteen companies have filed for an initial public offering (IPO) since the start of February when Hong Kong authorities and companies began taking steps to limit the spread of the coronavirus.
Malaysian software developer C-link Squared, the latest company to file for an IPO, referenced the coronavirus 34 times in its listing application following the stock exchange’s demand, documents showed.
IPOS are big business in Hong Kong. The city saw $25 billion raised through them last year, without including the $12.9 billion from Alibaba’s secondary listing, placing the exchange third globally behind New York’s Nasdaq and the Saudi Exchange, according to Refintiv data.
However, the number of deals completed in the past five weeks has slowed sharply as face-toface meetings were cancelled and global financial markets tumbled on fears the spreading virus will become a pandemic.
The city’s benchmark Hang Seng Index has slid 5.9% since Jan.24, the last trading day before the Lunar New Year holiday during which the coronavirus spread rapidly in Hubei province, the epicentre of the epidemic in china.
These centre on detailing any supply chain disruptions, business contingency plans and the burn rate of existing cash balances in a worst case scenario where the group’ s operations are suspended.