Stock exchange reforms set up Hong Kong for success
narrowed the price spreads of hundreds of stocks to facilitate trading. Meanwhile, it has also
lowered the minimum share float of IPO candidates looking to raise capital.
Advertisement
All these come at an opportune time as Hong Kong has regained
its No 1 title in the global IPO ranking amid a fantastic stock rally this year.
The narrowing of the trading spread for about 300 stocks aims to lower transaction costs and increase turnover. Essentially, it means lowering further the minimum price change for a stock being traded to narrow the spread between the bid and ask prices. It might not mean much for small retail investors, but for large traders and international investors dealing with large amounts of shares, it could translate into real savings.
Meanwhile, the stock exchange has made it easier for companies to launch local IPOs by reducing the public float requirement. For companies that are already listed on the mainland, the minimum float for a Hong Kong IPO has been set at HK$3 billion (US$386 million) or 10 per cent of their outstanding capital, which is down from the current 15 per cent. For smaller companies, the new requirement will range between 5 per cent and 25 per cent, depending on their market value.
Given the current geopolitical risks and market uncertainties, many mainland Chinese firms no longer look overseas, especially the United States, for secondary or primary listing. Instead, in what has been called a 'homecoming', an IPO in Hong Kong is seen as a much safer and more efficient route to raise capital.
Advertisement
That, of course, has greatly contributed to the current IPO bonanza, which is expected to continue for the rest of the year.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
South China Morning Post
an hour ago
- South China Morning Post
China's Hermitage Capital bets big on AI as it sees tech shaping the future
One of Asia's top private equity funds is betting big on artificial intelligence and humanoid robots, envisioning a future where AI-powered implants are plugged into human brains, allowing people to experience the world in ways once confined to science fiction. The euphoria surrounding AI will define this decade, according to Sean Xiang Yuqiu, founder of Hermitage Capital . 'It's just like 1995, when the internet era took off and ran for 20 years, giving rise to legendary companies like Yahoo, Amazon and Google,' he said in an interview with the Post recently. Xiang, who has been featured in the latest edition of Fortune China magazine's 40 Chinese business elites under 40 released on Tuesday, said Hermitage would invest at least US$500 million in the AI and robotic sectors over the next three years. With a decade of experience at Wall Street investment bank JPMorgan Chase before founding Hermitage Capital in 2017, Xiang said the company's investments focused on building a global AI ecosystem, ranging from hardware like graphics processing units to large language models (LLMs) and intelligent robotics. 03:16 China shows off latest AI innovations at international conference in Shanghai China shows off latest AI innovations at international conference in Shanghai He drew a parallel to humanoid robot making to illustrate his investment strategy. 'You need a brain to process information, eyes to observe the world and blood as your power source,' he said. 'It must also sense the external world and respond to it effectively. We've invested across all these areas, from foundational AI models to robot chips to solid-state batteries and home robots that free people from tedious chores.' Computer vision led the first wave of AI's evolution, which was now largely mature, Xiang said. 'We are currently riding the natural processing language wave, dominated by LLMs. The foundation models' valuation will still have a five to 10 times return potential.'
South China Morning Post
an hour ago
- South China Morning Post
US-China trade truce a test of both countries' stamina
After two weeks of mixed signals from Washington, US President Donald Trump has finally confirmed an agreement with China to extend the tariff war truce for another 90 days. The new pause, approved hours before the ceasefire was due to end, headed off the risk of escalation. It sets the stage for a test of stamina and resilience between the world's two biggest economies as they try to reach a reciprocal tariffs deal. The extension, agreed between top officials in talks in Stockholm last month but subject to Trump's approval, reflects the reality that neither possessed enough leverage to push the other to make a big compromise. Moreover, political and policy expectations are different, particularly in Washington. Among Trump supporters, there remain those who still insist on playing hardball with China. The question is what will happen now. Both sides are trying to buy time, but from different perspectives. Voices in the US talk up the possibility of the Chinese economy coming under pressure, though it performed better than expected in the first six months of the year. Doubters hope this was partly driven by US importers placing early orders for Chinese goods ahead of higher tariffs. In the next six months, China's economy faces a deteriorating external environment and some structural issues. While this would put the US in a stronger position, there are now many people talking up risks on the US side – national debt, lower-than-expected job creation, and inflation, for example. That said, there is an element of wishful thinking on both sides about the erosion of the other's position. Far from foreshadowing a mutually acceptable deal on tariffs, the truce is a test of each economy's stamina during political and economic negotiations. Trump meets Russian President Vladimir Putin on Friday. There are hopes that Trump and President Xi Jinping will meet later this year. A positive outcome all round could build the impetus for meaningful reductions in proposed tariffs. Trump's attempts to talk up increased US soybean exports to China says as much about his need to shore up rural electoral support as it does about China's need for them, given diversified sources.
South China Morning Post
2 hours ago
- South China Morning Post
Hong Kong's Food Expo can whet the appetite for new ideas
Hong Kong has long enjoyed a reputation for being a food paradise, offering a wide variety of cuisines and styles, from cheap traditional eateries to high-end gourmet restaurants. However, the industry is facing challenging times as diners' tastes change, with residents heading to the mainland on holidays and rents remaining high. There has been a worrying wave of closures. Advertisement The Food Expo , opening on August 14, provides a timely opportunity for residents and visitors alike to eat and drink to their heart's content, reviving their appetite for spending in the city. Last year, a record half a million consumers attended the five fairs that run in August. In addition to the Food Expo, these include Beauty and Wellness, and Home Delights exhibitions, as well as a Food Expo Pro event, aimed primarily at the trade, and an international tea fair. The festival will feature 1,890 exhibitors from 35 countries and regions. The diversity of the food on offer is impressive, with 45 regional pavilions. Theme days include a focus on intangible cultural heritage, Asian delights and healthy eating. To mark the 35th edition of the Food Expo, 100 products will be on sale for HK$35. And there will be entertainment, too, from tai chi to a 'coffee cupping' challenge for baristas and dim sum demonstrations. Stimulating local consumption is one of the declared aims of the expo, organised by the city's Trade Development Council. The challenge, however, will be to harness the enthusiasm for food fuelled by the festival so that it re-energises the sector. Eateries need to innovate and adapt to changing market demands, appealing to younger diners. This especially applies to more traditional outlets. Inspiration might be found at the expo, both for long-standing establishments and new entrants. It features a Food Science and Technology Zone which looks to the future as well as some eye-opening food and drink products from around the world. Advertisement Helping outlets survive and driving a rebound in the sector will require a joint effort from all concerned – the government, landlords, banks and the retailers themselves. But the Food Expo can encourage spending, generate new ideas and give the industry a much-needed lift.
