Will diversification restore Hong Kong’s IPO title? Think tank maps out plan

Hong Kong needs to diversify the source of its listed companies and investors if it is to reclaim its recently lost crown as the world’s top initial public offering (IPO) venue, according to a government think tank.

“Hong Kong should continue to find ways to diversify both its listing issuers as well as potential future investors,” said Benjamin Hung Pi-cheng, chairman of the Financial Services Development Council (FSDC), at a media briefing on Wednesday. “That form of diversification enhances the quality rather than [simply] focusing on quantity.”

The comments came as Hong Kong Exchanges and Clearing’s main board, the world’s largest IPO market last year and in the first quarter, lost its crown to Nasdaq following Elon Musk’s SpaceX blockbuster listing, which raised US$75 billion last month.

Hung said the city could still attract a lot of new economy companies to list, and could regain ground by drawing issuers from across Asean, the Middle East and Europe.

“Hong Kong could attract these international companies to list here as it is the only market where they can attract mainland Chinese investors via the Stock Connect scheme,” Hung said.

More than 90 per cent of IPOs in Hong Kong in recent years had come from mainland firms, according to LSEG Data & Analytics.