June 19, 2017 2:51 pm JST  (Updated June 19, 2017 5:32 pm JST)

HKEx shares jump on proposal for third stock board

'New economy' section seen luring up-and-coming companies to Hong Kong

CHINATSU HAYASHI, NQN staff writer

Hong Kong stock exchange

HONG KONG -- Shares in Hong Kong Exchanges & Clearing rebounded on Monday, after the bourse operator proposed on Friday the creation of a new stock board along with rule changes for listing on its two existing sections.

At one point, the company's stock price jumped 5.60 Hong Kong dollars, or 2.83%, to HK$203.20 -- the highest level since June 12.

The third board, intended for companies in "new economy" sectors such as tech and health care, is scheduled to start operating by 2018. To best accommodate businesses in these fields, the Hong Kong stock exchange operator has also suggested dividing the board into "New Board Pro" and "New Board Premium" segments.

The pro board would have relatively loose listing standards, and would be open only to professional investors. The premium board, meanwhile, would have the same listing rules as the main board. This section would be open to retail investors as well.

A key selling point of the new board is that companies that issue classified stocks, which have more voting rights than regular equities, will be able to list. Chinese e-commerce giant Alibaba Group Holding ditched Hong Kong for New York for its flotation in 2014, due to the lack of options for companies with nonstandard governance structures.

The Securities and Futures Commission, the city's financial market regulator, declined to comment under what circumstance it will recalibrate and approve the weighted-voting right structure as proposed in the consultation. But its spokesperson told the Nikkei Asian Review on Monday that it "welcomes the consultations of the stock exchange on the New Board and the review of the Growth Enterprise Market."
 
 "We encourage the public to express their views on these proposals as they deal with some complex and difficult issues which have implications for the overall diversity and quality of the Hong Kong securities market," said the spokesperson of the financial market watchdog. "We look forward to a well-informed and wide-ranging public discussion on all these issues during the consultation period."
 
 Nikkei staff writer Joyce Ho in Hong Kong contributed to this story.

Asia300

Hong Kong Exchanges & Clearing Ltd.

Hong Kong

Market(Ticker): HKG(388)
Sector:
Industry:
Finance
Investment Banks/Brokers
Market cap(USD): 31,641.21M
Shares: 1,231.59M
Asia300

Alibaba Group Holding Ltd.

China

Market(Ticker): NYS(BABA)
Sector:
Industry:
Retail Trade
Internet Retail
Market cap(USD): 359,852.65M
Shares: 2,529.36M

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