(which raised P750 million) Citicore Energy REIT Corp. With more companies inquiring how they can tap the equities market for capital to fund their expansion, we deemed it was essential to offer a more comprehensive road to IPO program,” said Ramon Monzon, president and CEO of PSE.īased on PSE data, eight new names have debuted on the stock market so far this year: Haus Talk Inc. Sometimes common sense does trump profit in financial markets.“We have had a robust IPO since last year. And a deal of that size and a company of its reputation would almost guarantee plenty of demand regardless of where it chooses to list.Īnd while shutting the door on Alibaba is being hailed as a huge mistake in many quarters, HKEx has now given itself time to rethink its “one share, one-vote” rationale, and come up with a solution that will suit Hong Kong. While the tech giant may have lost out on listing where the investor base is relatively more familiar and comfortable with its business, the US is still the go-to place for tech companies. It’s not hard to see why he was worried, as listing under HKEx’s current rules method could very well see him lose control of the company.īut even if HKEx does change the rules, it will be too late for Alibaba. In the case of Alibaba, there are a total of 18 founders, with Ma only holding a 7.4% stake. One of the most obvious benefits would be to allow Hong Kong to win a greater share of listings from Chinese tech companies which typically have complex shareholding structures. However, this does not mean that Hong Kong should completely dismiss the idea of introducing a dual class shareholding, especially if it wants to keep up with the increasingly competitive word of exchanges. Hong Kong’s regulator, the Securities and Futures Commission, is not exactly famous for being the quickest to act. Would it be possible for all these changes to be made in time for Alibaba to list by the end of the year? Probably not, when you take into account the amount of time needed for consultation and regulatory approval.

That could have led to a situation of large issuers lining up to receive similar concessions.Īnd even if HKEx had accepted Alibaba’s shareholder structure, or gone a step further and adopted a US-style dual class shareholder structure, it would have required huge changes to the city’s listing rules, takeover laws and company registry articles, to name but a few. While it was no doubt painful - and certainly controversial - for Hong Kong to shut out a listing that is almost twice the $7.9bn total raised through IPOs so far this year, it was the right decision.įor starters, if HKEx had given in to Alibaba, it would have been viewed as an institution that is willing to compromise its beliefs as long as the financial incentives are attractive enough. Such a structure would have gone against its “one-share, one-vote” principle.Īs a result, Alibaba is now rumoured to be pursuing a listing in the US, where dual class share structures are allowed. Under the proposal, Alibaba’s management, led founder and executive chairman Jack Ma, would have been able to retain control of the company even after having holdings diluted by a listing.

That, however, is now looking highly unlikely after the Hong Kong Stock Exchange rejected Alibaba’s proposal to have a share structure that allows its partners to nominate the majority of the board members.

As it was widely expected to be the largest listing in Hong Kong since AIA’s $20.5bn float in October 2010, there was a lot of hope pinned on Alibaba’s estimated $15bn IPO giving a jolt to the city’s equity market.

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