Hong Kong Exchanges & Clearing Ltd. approved the biggest change to its initial public offering rules in two decades, putting it in a position to battle New York for some of the world’s hottest companies.
Technology firms that have shares with different voting rights will now be allowed to go public in Hong Kong, overturning rules that barred the likes of Alibaba Group Holding Ltd. from considering the former British colony. Businesses will be able to apply under the new regime starting April 30, HKEX said Tuesday.
The new framework is a victory for the exchange and its Chief Executive Officer Charles Li, who championed the changes after losing Alibaba and other tech titans to venues in New York, where dual-class shares and similar structures have long been permitted. The step could be a landmark for Hong Kong’s efforts to be the leading home for international Chinese listings and builds on Li’s vision for a trading hub that rivals the U.S.
Some of the world’s largest and most influential technology companies, from Facebook Inc. to Google parent Alphabet Inc., have share classes with different voting rights to protect their founders’ influence after going public. The structures are contentious because they reduce the rights of other shareholders, and investors including BlackRock Inc. opposed HKEX’s plan.
The city lost to New York and Shanghai in the global IPO rankings last year, with funds raised down 33 percent compared with previous year to $16.9 billion, the lowest level since 2012, according to data compiled by Bloomberg.
The payoff for HKEX could come very soon. Xiaomi Corp., Ant Financial Services Group and Lufax, the peer-to-peer lending unit of Ping An Insurance (Group) Co., are among a number of Chinese technology giants preparing to go public. Smartphone maker Xiaomi is considering listing in both Hong Kong and Shanghai and targeting a valuation of about $100 billion.
Bloomberg
