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In April 2018, HKEX implemented changes to its listing rules that marked a significant milestone for Hong Kong’s market, adding three new chapters to the Main Board Listing Rules to provide a listing pathway for pre-revenue Biotech companies (Chapter 18A), New Economy companies with weighted voting rights (Chapter 8A), and overseas-listed Chinese companies (Chapter 19C).
Let’s look at the continuing transformation of Hong Kong’s market, five years on.
New Economy sector takes up growing share of IPO fundraising
Since our listing reforms in 2018, we have attracted the listings of a host of New Economy companies, which have added to the diversity and vibrancy of Hong Kong’s markets.
Between April 2018 and the end of March 2023, 260 New Economy companies have listed in Hong Kong, of which 56 biotech companies sought a Chapter 18A listing, 22 innovative companies with weighted voting rights listed using Chapter 8A, and 19 overseas-listed Chinese companies sought a secondary listing using Chapter 19C.
New Economy companies now account for 65% of total IPO funds raised in Hong Kong, an increase from 49% in 2018.
Seven of the top ten companies with the most IPO funds raised in 2022 were all from the New Economy sector.
Asia’s leading biotech fundraising centre
HKEX is now Asia’s leading IPO hub, meeting the fundraising needs of a diverse range of biotech companies, including those that are engaged in the healthcare and pharmaceutical sectors.
Since 2018, over 112 healthcare and biotech companies have listed on Hong Kong’s market, raising over HK$265 billion. Of these, 56 were pre-revenue listings and raised over HK$116 billion.
A growing ecosystem of product offerings
The growth of the new economy has not only enriched Hong Kong’s market ecosystem, it has also led to the expansion of the suite of related investment products. There are currently a number of ETFs that track the performances of the Hang Seng Tech Index and the Hang Seng Stock Connect Biotech 50 Index, allowing investors to diversify their portfolio in the new economy space. In 2022, HKEX also launched the Hang Seng Tech Index Options, Futures and Futures Options, providing additional instruments for investors to manage the associated risks.
Trading of New Economy companies in Hong Kong’s market has grown increasingly popular over the years, with the average daily turnover (ADT) of their stocks reaching HK$31.9 billion in March 2023, contributing 24.9% to the ADT of the entire cash market, up from just 1% in 2018.
Continuous enhancements of the listing framework
The new economy is changing the way in which we live and work, and HKEX is continuously supporting this rapid market transformation.
In March, HKEX announced a new listing framework for specialist technology companies after receiving strong market support. The new rules enable pre-commercial or commercial companies from five frontier technology industries to seek a listing in Hong Kong.
Looking ahead, HKEX will continue to enhance its attractiveness as the global home of new economy IPOs, further connecting capital with opportunities.
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