Hong Kong bourse seeks to woo Southeast Asia, Middle East firms for second listings
HONG KONG: The Hong Kong stock exchange plans to attract listed companies in Southeast Asia and the Middle East, in particular, for second listings in the financial hub, its chief executive said, as the bourse looks to burnish its global credentials.
Hong Kong Exchanges and Clearing Ltd (HKEX) also sees a pickup in the number of companies listed in mainland China markets seeking a listing in the city to raise capital for their global expansions, Bonnie Chan said.
"We're now more focused on companies which are actually already listed on another market, but might have outgrown their domestic market," said Chan, a former capital markets lawyer, who took over as HKEX's first female CEO last year.
"I am now beginning to realize that our sweet spot may not be private companies."
As part of those efforts, the Hong Kong stock exchange will soon open a representative office in Riyadh, Chan said, which will allow "even closer connection" with the Saudi exchange, after recent product launches.
Three Singaporean firms listed in Hong Kong over the last 12 months, and a Thai company is expected to do the same soon, Chan said, adding HKEX's talks with potential issuers from outside the Greater China region has "gained quite a bit of momentum."
The Hong Kong exchange, which is the most preferred venue for Chinese companies looking to raise offshore capital, has been striving to attract IPO hopefuls from elsewhere as part of its ambition to become a global capital raising platform.
While that goal has met with limited success so far, Chan's efforts come against the backdrop of increased flows of capital into non-US markets as US President Donald Trump's policies cloud investors' appetite for dollar-denominated assets.
A surge in listings and follow-on share offerings by Chinese companies, such as electric vehicle battery giant CATL's raising of US$5.3 billion last month, however, has boosted HKEX's outlook after it reported record high profit in the first quarter.
The Hong Kong exchange has emerged as the top destination globally for listings by volume, with a total of 31 companies raising US$10 billion this year, according to LSEG data, with another US$26 billion raised via follow-on share issuances.
INVESTOR INTEREST
The momentum is set to continue mainly due to a strong list of mainland Chinese firms tapping the Hong Kong market to raise capital for global expansion plans, as Beijing steps up efforts to bolster its private enterprises and revive its economy.
More than 20 mainland China-listed companies have applied to raise capital in Hong Kong by issuing shares, while another 20 have announced similar plans, Chan said, hoping to ride bullish investor sentiment.
The Hang Seng index is up nearly 19 per cent so far this year. The number of companies in HKEX's IPO pipeline have doubled to more than 160 as of Friday from around 80 in end-December 2024, filing records show.
"Amidst all the development in the world, we are now seeing investors again turning their attention to this part of the world when they assess investment opportunities, fundraising venues," Chan said.
U.S. investors' demand for shares in recent Hong Kong listings has increased significantly, she said. "That's a good indication that the interest has returned from investors across different markets."
Reuters reported last month, citing sources, that online fast fashion retailer Shein was working towards a listing in Hong Kong after its proposed IPO in London failed to secure the green light from Chinese regulators.
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