Hong Kong is contemplating ‘dual-class’ share listings for non-tech corporations, says official

Hong Kong is contemplating whether or not to permit non-tech corporations to listing on town’s inventory change utilizing the “dual-class shares” framework, a high authorities official informed CNBC on Tuesday.

A dual-class construction, also referred to as weighted voting rights, permits corporations to problem completely different lessons of shares. Sometimes, one class of shares have extra voting rights than the opposite — a framework favored by many tech corporations because it provides founders and insiders extra management.

“One factor that we’re trying into is … by way of the secondary itemizing regime that we have now, whether or not the Higher China corporations with weighted voting rights — and but not within the innovation, technological sector — can profit from this regime and are available to listing in Hong Kong,” Christopher Hui, Hong Kong’s secretary for monetary companies and the treasury, informed CNBC’s “Squawk Field Asia.”

The Hong Kong change in 2018 amended its guidelines to permit corporations from “rising and revolutionary sectors” to listing utilizing the dual-class framework. That has helped town to draw main Chinese language tech corporations, together with Xiaomi and Alibaba, to listing on the Hong Kong inventory market.

Town has been among the many world’s high markets for listings over the previous couple of years.

In 2020, the Hong Kong inventory change noticed 154 new listings that raised $51.6 billion, in line with knowledge compiled by consultancy PwC. Distinguished Chinese language corporations that made their debut within the metropolis final yr embody e-commerce big JD.com and gaming firm NetEase.

Hui stated he is “very optimistic” concerning the outlook for public listings in Hong Kong, and expects the momentum in the previous couple of years to proceed.

To this point this yr, extra Chinese language corporations have listed in Hong Kong, together with Tiktok rival Kuaishou, tech big Baidu and streaming firm Bilibili.

SPAC listings in Hong Kong

Inventory exchanges in Hong Kong and different Asian cities are contemplating permitting the listings of particular goal acquisition corporations or SPACs. They’re “clean examine” corporations that increase cash by means of IPOs with the intention of merging with or buying an present non-public agency to be able to take it public.

SPACs have gained a lot consideration previously yr, with an growing variety of corporations selecting to go public within the U.S. utilizing such a way.   

Bloomberg reported Monday that Hong Kong is preparing a SPAC itemizing framework by June to collect public suggestions, and is concentrating on the primary such deal by the top of this yr.

Requested whether or not the framework is on observe for launch, the Hong Kong official stated town’s regulator and change operator have been tasked to check how Hong Kong can implement SPAC listings.

“I feel for any new initiative, for market improvement concept to fly, we have to strike a stability, on the similar time it needs to be sustainable,” stated Hui.

“So we have now to make it possible for whereas on the one hand, we’re benefiting from this new development to develop our market, but on the similar time have our traders duly protected.”

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