HKEX reaches out to Saudi, Indonesian firms for listings

The Hong Kong exchange operator is reaching out to companies in Saudi Arabia and Indonesia as it seeks to broaden its potential listing candidates from emerging markets after losing some big initial public offering prospects from the mainland.

“We have recently engaged in preliminary communications with companies in Saudi Arabia and Indonesia,” said Bonnie Chan Yiting, CEO of Hong Kong Exchanges and Clearing (HKEX). “They have shown a genuine interest in Hong Kong’s market.”

Some of these firms were required to be listed first in their home market before they could pursue an offshore listing, creating a time lag in the process, she said when discussing measures to promote liquidity and competitiveness in the securities market at the Legislative Council yesterday.

The exchange added the Saudi Exchange, or Tadawul, and the

Jakarta Stock Exchange as “recognised” bourses last year, creating a short cut for companies traded on both venues to consider a secondary listing in Hong Kong.

This recognition followed agreements to explore cooperation in a number of areas, including cross-listing opportunities.

The listing of a Saudi-focused exchange-traded fund by CSOP Asset Management in December, the first of its kind in Asia, was a significant development, HKEX deputy CEO Wilfred Yiu Ka-yan said at the Legco meeting.

It showed Hong Kong’s robust financial system and service support, allowing issuers to choose the city as their listing location, he said.

China’s top exchanges managed fewer listings as proceeds from these deals in Hong Kong, Shanghai and Shenzhen fell. Alibaba Group Holding, the owner of the Post, recently assessed its internal reorganisation plans, freezing possible share sales from AliCloud, Cainiao Smart Logistics and Freshippo.

Listing proceeds in Hong Kong declined by 29 per cent to HK$4.73 billion in the first quarter from a year earlier, according to data compiled by London Stock Exchange Group. The Shanghai and Shenzhen bourses suffered a 72 per cent and 85 per cent drop, respectively.

Meanwhile, some Legco members raised concerns about the lengthy listing process during the discussion. Chan said the median approval time for mainboard listings had been shortened significantly, from 70 business days in 2022 to 48.

While there was still room for improvement, she said the listing market had been affected by factors such as macroeconomics and high interest rates.

To enhance revenue and tax collections, HKEX has proposed to the government that it keep the stock market running during adverse weather such as typhoons. A public consultation paper was issued in November last year to gather feedback from institutions and investors regarding this proposal.