Hong Kong regulator sees rise in listings of young growth firms
Hong Kong has seen the share of growth-company listings in sectors such as biotech and AI rise to 30 per cent from 10 per cent in 2023, the SFC chief said. Improved market infrastructure and bourse reforms attracted these firms, which are typically three to five years old.
Hong Kong has seen an increase in listings of growth companies, those yet to achieve sustained profitability but with strong growth potential, due to improved market infrastructure, the chief executive of its Securities and Futures Commission (SFC) said on Monday.
Among firms listed on Hong Kong's bourse, the portion of growth companies in sectors like biotechnology and artificial intelligence has risen to 30 per cent from 10 per cent in 2023, Julia Leung Fung-yee said during a seminar in Tokyo hosted by Japan's Financial Services Agency.
"Our stock exchange has actually done proactive reform and put in regimes to attract growth companies," she said at the seminar on global capital markets. That has balanced the need to offer sufficient investor protection while allowing the entry of firms that have not fully commercialised their products yet, she added.
Most growth companies were three to five years old, with some developing AI models. The Hong Kong stock exchange has also improved market infrastructure for clearing and settlement of deals, Leung said.
Hong Kong benefits immensely from being on the doorstep of China, which is a big producer of the entire AI chain, she said, adding that startups were hungry for capital and looking for international expansion.
"Now we have a very buoyant market," she said. "But it is important, particularly where market conditions are weakening, that we actually be a lot more selective" in what to bring to the market and "prioritise quality over speed," she added.
The SFC is an independent body set up in 1989 to regulate Hong Kong's securities and futures markets.