
China to let more SMEs list in Hong Kong
China will allow more small- and medium-sized enterprises to list in Hong Kong in what could be a game changer for private equity firms seeking overseas IPO exits for portfolio companies. The move, announced at the Asian Financial Forum in Hong Kong by Yao Gang, vice chairman of the China Securities Regulatory Commission, is part of efforts to ensure Hong Kong benefits from mainland capital markets reforms.
Chinese listings in Hong Kong have until now been dominated by large state-owned enterprises, but Beijing is under pressure to do more for SMEs, the Financial Times reported. The private sector generates the bulk of China's economic growth, jobs and corporate tax revenue, yet independent companies have suffered more than there state-owned counterparts as a result of tighter bank lending.
"In terms of both policy and finance, privately owned companies don't have the advantages of state-owned enterprises," said John Zhao, CEO of Hony Capital. "In overcoming the crisis, the policy again favored the SOEs and presented more pressure on the privately owned enterprises. Relaxing government controls would help."
Opening up a channel for more SME listings in Hong Kong would also allow firms to avoid the long waiting list for domestic bourses, where priority is often given to those with political clout rather than investment merit.
Yao also said that the CSRC would allow qualified foreign institutional investors greater access to renminbi with which they can invest in mainland equities, look at introducing Hong Kong-listed ETF products that track the A-Share index, and consider sanctioning more renminbi-denominated bonds and shares in the city.
However, other participants at the forum argued that mainland regulators are moving too slowly and called for more radical change.
Latest News
Asian GPs slow implementation of ESG policies - survey
Asia-based private equity firms are assigning more dedicated resources to environment, social, and governance (ESG) programmes, but policy changes have slowed in the past 12 months, in part due to concerns raised internally and by LPs, according to a...
Singapore fintech start-up LXA gets $10m seed round
New Enterprise Associates (NEA) has led a USD 10m seed round for Singapore’s LXA, a financial technology start-up launched by a former Asia senior executive at The Blackstone Group.
India's InCred announces $60m round, claims unicorn status
Indian non-bank lender InCred Financial Services said it has received INR 5bn (USD 60m) at a valuation of at least USD 1bn from unnamed investors including “a global private equity fund.”
Insight leads $50m round for Australia's Roller
Insight Partners has led a USD 50m round for Australia’s Roller, a venue management software provider specializing in family fun parks.