Hong Kong’s role as a fundraising hub for international companies
Nov 9, 2023

In this latest report, HKEX’s Chief China Economist’s Office analyses Hong Kong’s position as a fundraising hub for international companies and looks forward to future developments that may further boost its attractiveness.


International finance centres and offshore listings

It is rather common for companies around the world to seek a listing outside their domestic markets. International financial centres (IFCs) are considered the most attractive for offshore listings, regardless of their sizes, sectors and origins. While Mainland China, with its fast-growing economy, is a key source of offshore listings, demand for offshore listings from companies in other parts of the world is also significant. 

Companies tend to seek initial public offerings (IPOs) in their domestic markets first, but may consider or prefer primary or secondary listings in overseas markets for various reasons, including widening their investor bases and funding channels, supporting business expansion and cooperation, enhancing their global standings and brand awareness, and pursuing listing regimes and related disclosure and governance requirements that meet investors’ needs. 

Hong Kong is one of the world’s top-ranked IPO venues

Hong Kong has been one of the world’s top-ranked IPO venues for many years and is a major offshore equity financing centre for Mainland companies and the most popular overseas listing venue for companies in member countries of the Association of Southeast Asian Nations (ASEAN).

Hong Kong’s listing regime has evolved to welcome companies from around the world, and facilitate the primary and secondary listings of diverse types of domestic and overseas companies, including new-economy companies, while upholding strong investor protection.

One attraction of Hong Kong is its unique position to offer two-way connectivity between Mainland China and the world, and this creates multiple advantages. The market also has efficient and well-established infrastructure, a diversified base of global and Mainland investors, and a mature asset management industry to serve growing investor demand for Mainland and global asset allocations.

Stock Connect has boosted market liquidity in Hong Kong

Policy initiatives, such as the Stock Connect programme in particular, have boosted liquidity in Hong Kong’s stock market. Southbound trading under Stock Connect has become a key channel of overseas asset allocations and portfolio diversification for Mainland investors.

Continuous enhancements to the Stock Connect scheme include the expansion of the scope of securities eligible for Southbound trading since 13 March 2023 to include eligible international companies primarily listed in Hong Kong. Coupled with continued product innovation and market enhancements, it is expected that the inclusion of international companies in Stock Connect will boost market liquidity over time.

In terms of market developments, Hang Seng Indexes Company has conducted a market consultation on adding international companies primarily listed in Hong Kong to the Hang Seng Index. If implemented, this may attract more passive funds into the market, potentially boosting liquidity for stocks of overseas issuers, expanding the ecosystem and increasing the attractiveness of the market as a key fundraising centre for international companies and an investment hub in Asia.

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