Hong Kong's New Listing Rules May Help Red-Hot IPO Market to Stay Hot

Public float requirement eased for big China firms; bulk of shares for institutional buyers

- 

HONG KONG - Hong Kong's changes to its listing rules are likely to pave the way for one of the world's hottest markets for initial public offerings (IPOs) to stay hot for longer.

That is based on early reactions to the Aug 1 announcement by the local exchange, which handed out incentives for big Chinese companies to list in Hong Kong by easing the minimum public float requirement, and ensured that institutional investors get the bulk of shares offered during hot listings. The rules go into effect this week.

The changes are designed to encourage more companies - particularly those whose shares already trade in mainland China - to list in Hong Kong and to set aside enough shares for large institutional investors.

The idea is that the moves will help the city's listings market, which is forecast to double to more than US$22 billion (S$28 billion) in 2025, prolong the rally and solidify its place as Asia's premier financial hub.