HKSE Listings: Listing On The Hong Kong Stock Exchange
Firstly, we are not affiliated to the exchange in any way, we are just very intrigued by the vast sized IPO’s that have occured on the exchange with the notable influence of investment in Asia as the oldest and most prestigious of the exchanges. We will described some of the process and reasons for listing on the exchange, but ultimately refer you back to the website of the exchange in the event information has changed since the post. In the near future, we intend on endorsing professionals who specialize in IPO’s on the exchange from major brokerage firms to the appropriate legal contacts.
Using again the example of the Las Vegas Sands listing to acquire capital by listing on the HKSE for their Macau projects, a company listing is able to achieve a realization of part of the investment of shareholders, complete the development of the project that until the IPO will have been insufficiently funded, and expand its business operations. In general the companies that list have:
- Access to capital for growth with opportunities to raise funds both at the time of listing and at later stages
- Broader shareholder base could potentially lead to a more liquid market in the trading of the company’s shares
- Employee and incentive and commitment resulting from the grant of employee share options to tie in the company’s key staff
- Higher profile and visibility in the market could generate reassurance among the company’s customers and suppliers
- Increased corporate transparency could lead to the grant of credit lines on more competitive terms from the company’s bankers and loans, which was one of the primary stages set for the IPO of LV Sands with the ease of loan terms due to the impending IPO
Whatever your reasons for listing, it is important that you consider and discuss with your advisers all the factors which are specific to your company and the vision of its management.
It is clear from the response of the brokers and analysts that support IPOs on the Hong Kong Stock Exchange, the realized value from listing is often immediate and a major win for companies who can achieve the listing on the mainboard.
What Are The Three Most Compeling Arguments For Listing On The Hong Kong Stock Exchange?
Gateway to Mainland China
With close trading and business links to other Asian economies, Hong Kong is strategically placed in a high growth region. As an internationally recognized financial centre with an abundance of professional expertise, our Exchange has provided many Asian and multinational companies with fund-raising opportunities.
Leveraging on Mainland China’s Growth
Hong Kong provides an ideal platform for issuers to achieve exposure in the rapidly growing Mainland Chinese market. Together with China’s accession into the World Trade Organisation (WTO) and Beijing’s hosting of the Olympics in 2008, companies will be able to leverage on the multitude of opportunities offered by this escalating economy.
Home Market Theory
As Hong Kong is part of Mainland China, our market is the first choice for Mainland Chinese companies seeking a listing on an international overseas market. The applicability of the “home market” theory is reinforced by the statistic that a significant portion of the trading value of Mainland Chinese companies is conducted in Hong Kong where such companies have a dual listing in Hong Kong and another major overseas exchange.
Why is now the best time to be looking to Asia?
The capital markets in Asia have been least effected recently and want the business of new listings. Their missions statement is to increase their listings to be the main gateway for China, Hong Kong, and the rest of Asia with an increased focus on foreign issuers.
Listing on the Hong Kong Stock Exchange is a status symbol, where by increased profile and visibility in the Asian markets is immediate.
With effect from 1 July 2008, companies applying for a listing on the Main Board of the Exchange can do so in the form of depositary receipts (HDRs). The HDR framework is launched as an alternative facility for companies to list on the Exchange, in particular for listing applicants from jurisdictions that prohibit the issuance of shares or the maintenance of a share register overseas. For more information, please see News Release dated 9 May 2008.
Offer for Subscription
An offer to the public by, or on behalf of, an issuer of its own securities for subscription.
Offer for Sale
An offer to the public by, or on behalf of, the holders or allottees of securities already in issue or agreed to be subscribed.
The obtaining of subscriptions for, or the sale of securities by, an issuer or intermediary primarily from or to persons selected or approved by the issuer or the intermediary.
An application for listing of securities already in issue where no marketing arrangements are required.
Transfer from GEM
A GEM issuer may transfer its listing to the Main Board under a streamlined procedure.
Upon completion of the restructuring process, the sponsor will be responsible for submitting the listing application to the Exchange on the company’s behalf. The listing process upon the submission of the listing application to the Exchange can be found as follows:
What are the HKSE listing fees?
Who are the parties involved in a new HKSE Listing?
A listing exercise involves various professional parties which have their own unique role in the process. This section aims to explain the key players in a share offering.
A company must appoint a suitable sponsor for its listing proposal. A sponsor must be a corporation or an authorised financial institution licensed or registered by the Securities and Futures Commission. The sponsor will be responsible for preparing the company for listing, for lodging the formal listing application and all supporting documents with the Exchange, and for dealing with the Exchange on all matters arising in connection with the application.
Before you appoint a sponsor, we strongly advise you to speak with a selection of sponsors to assess their suitability to act as sponsor to your company’s listing. You should select a sponsor that is able to offer comprehensive and impartial advice regarding all aspects of the listing process.
2. Reporting Accountants
All accountants’ reports must be prepared by professional accountants who are qualified under the Professional Accountants Ordinance for appointment as auditors of a company and who are independent of the issuer.
Reporting accountants are responsible for reviewing the company’s financial records and position, and preparing the new applicant’s group accounts in accordance with relevant accounting standards and regulatory guidelines. This will enable prospective investors to make informed investment decisions.
3. Legal Advisers
Legal advisers are responsible for ensuring that the new applicant will be in compliance with the laws of each of the relevant jurisdictions. They will also work closely with the sponsor and reporting accountants on any restructuring undertaken by the new applicant.
4. Underwriters/Placing Agents
These are typically securities firms and our Exchange Participants who would be responsible for distributing the securities of the company during a share offering. Underwriters are required to underwrite any shares not taken up by investors.
Valuers are required to be appointed to attribute a value to a new applicant’s properties prior to a listing. Valuers may also be appointed to prepare valuation on other assets of the company.
6. Depositary (for issuance of HDR)
All HDR issuers must appoint a depositary. A depositary is a financial institution acceptable to the Exchange and appointed and authorised by the HDR issuer to issue or cancel HDR as agent of the issuer. The depositary, via its appointed custodian, also holds the shares represented by the HDR for the benefit of the HDR holders.
For more information on listing your company on the HKSE contact us at email@example.com
The complete list of information for listings and maintaining the listing is available at http://www.hkex.com.hk/issuer/listhk/listhk.htm