“If the trading volume in Hong Kong can be even better than in which from the U.S., the idea will send out a signal to some other brand new economy brand new listings in which Hong Kong can be a much better place for a listing than the U.S,” said Steven Leung, sales director at UOB Kay Hian in Hong Kong.
For Alibaba, the idea could provide greater access to investors closer to China who are familiar with its business along with allow the idea to benefit through the Hong Kong government’s growing support for financial services innovation, said James Lloyd, Asia-Pacific FinTech leader at consulting firm EY.
The HKEX said in December in which the idea had begun drafting specific rule alterations for allowing dual-class shares in which will be put up for a formal public consultation from the first three months of 2018.
Under the planned rule alterations, “innovative” Chinese companies that has a market capitalisation over HK$10 billion along that has a primary listing on the brand new York Stock Exchange, Nasdaq or the London Stock Exchange would likely be able to seek a secondary listing in Hong Kong. The HKEX has not yet defined what “innovative” can be.
“We are also creating a brand new route to secondary listings in Hong Kong to attract companies through emerging along with innovative sectors. We are aware in which many successful brand new economy companies already listed from the US along with UK would likely benefit through these reforms,” wrote Charles Li, chief executive of HKEX, in a blog post last month when the proposed alterations were put forward.
Just 3 per cent of Hong Kong listings from the past decade, by market value, have been so-called “brand new economy” companies, compared with 47 per cent for the brand new York Stock Exchange, according to a discussion paper published by the HKEX in June.
Some analysts said technical issues along with underlying concerns about the dual-class structure still needed to be resolved along with fine tuned.
“The main concern can be about the protection to minority investors under the dual structure,” said Linus Yip, chief strategist at First Shanghai Securities.