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Hong Kong should change inventory manners to attract tech companies to lift funds, possibilities say

Christopher Cheung Wah-fung, Ricky Chim Kim-lun and Gordon Tsui Luen-on will contest for 622 votes in a four-year tenure to paint Hong Kong’s financial services attention in a Legislative Council. Eligible electorate are stockbrokers, futures and bullion traders.

They are all job for reforms to change a Hong Kong market’s prevalence by financial services and skill companies, to attract record companies.

They are also job for measures to reboot a broking industry, and assistance a smallest brokers survive.

A week before a Sep 4 election, a 3 possibilities pronounce to a South China Morning Post about their thoughts on inventory reforms:

Christopher Cheung Wah-fung

Cheung, 64, a obligatory lawmaker who’s seeking re-election, pronounced Hong Kong needs a new house with stretchable inventory manners to attract record companies to lift supports here.

“The Growth Enterprise Market (GEM), launched in 1999 to attract record firms, was a failure,” he said. “We need a new house with inventory manners that are some-more loose than a categorical house and GEM.”

Hong Kong mislaid a tip mark as a world’s largest IPO marketplace in 2014 when Alibaba changed a record US$25 billion open offer to New York. Alibaba is owners of a South China Morning Post.

Hong Kong bars publicly traded companies with a twin shareholding structure, or shares that give shareholders unsymmetrical voting rights. That’s compelled many record companies to demeanour instead to a US to lift funds.

Only 22 of a 343 companies, or 6 per cent of a total, listed in Hong Kong between 2010 and 2013 were record related, Cheung said. Of a 30 mainland Chinese companies listed in a US, 29 had dual-class structures.

“If Hong Kong can find a approach for dual-class structure that protects investors, we would support it,” he said.

Hong Kong’s supervision should work with Chinese regulators to let internal brokers pointer on new clients on a mainland, he said.

“Hong Kong is a tiny marketplace with a race of usually 7 million,” he said. “If Hong Kong brokers can go north to open accounts for clients on a mainland, it would be really helpful.”

Gordon Tsui Luen-on

Tsui, 56, a former landowner who assimilated a bonds attention in 2000, is now handling executive of Hantec Group International Finance.

Like Cheung, he wants Hong Kong to exercise a third house with a opposite set of inventory manners to attract record companies.

“Hong Kong needs a new house with opposite regulations from a categorical house and a GEM to accommodate a needs of record companies,” Tsui said.

Ricky Chim Kim Lun

Chim, 47, is a maestro of a financial attention of dual decades, and a executive of several listed companies. His chair was before hold by his father Chim Pui-chung.

Hong Kong should follow US regulations to attract a far-reaching operation of companies to list here, not usually IT firms, he said.

“We wish companies in all industries and all sizes to list here to make it a diversified market,” he said.

Chim is also against to vouchsafing a SFC confirm on what companies to list.

“Hong Kong does not need a new board,” Chim said. “Hong Kong should adopt a avowal formed regulatory regime that allows companies to list as prolonged as a disclosed information meets a SFC’s standards. If a US can do it, so can Hong Kong.”

Even if open companies offer shares with opposite voting rights, they should still be authorised to lift supports in Hong Kong, and it’s adult to investors to confirm it they wish to accept these unsymmetrical rights, he said.

Hong Kong’s broking attention is dominated by 14 of a supposed Category A brokers owned by vast banks, now with 56.2 per cent share of daily transactions, adult from 28 per cent in 1999.

The center market, comprising 51 Category B brokers, keep a marketplace share of about 33.4 per cent of trade each day.

The bottom of a market, with 435 tiny brokers in Category C, now make adult 10.4 per cent of turnover, timorous from 40 per cent marketplace share from their heyday in 1999.

The smallest brokers have been foul treated by a regulator and a government, Chim said.

“Many supervision policies don’t advantage a tiny players, and might gradually force them out of business,” he said. “There should be some-more policies in place to assistance a tiny brokers contest with a large players.”

On Hong Kong’s due inventory reforms:

All 3 possibilities intent to a inventory reforms due in Jun by a HKEX and a SFC.

Under a proposal, dual new committees will be determined with equal series of member from a HKEX and a SFC to set policies for inventory companies on a exchange.

That’s too most energy in a hands of a SFC, according to all 3 candidates. The offer would be of small assistance to boost a Hong Kong bourse’s competitiveness.

As many as 95 per cent of all a internal brokers he’d met are all against to a due reforms, Tsui said.

“The due inventory remodel would usually mystify a inventory routine and widen a time for a approval, “ he said. “It would not speed adult a process. If a SFC insists on going forward with a reform, it’s going to kill off a marketplace here and supplement serve repairs to a low marketplace turnover.”