CDRs Will Entice Firms to List in Both Hong Kong and Mainland, HKSE Head Says

CDRs Will Entice Firms to List in Both Hong Kong and Mainland, HKSE Head Says

Luo Qi

Date: Wed, 04/04/2018 - 16:43 / source:Yicai
CDRs Will Entice Firms to List in Both Hong Kong and Mainland, HKSE Head Says
CDRs Will Entice Firms to List in Both Hong Kong and Mainland, HKSE Head Says

(Yicai Global) April 4 -- China’s stock market reforms will encourage more companies to consider listing on the mainland and in the special administrative region concurrently, significantly enhancing China’s new economy, according to Charles Li, the chief executive of the Hong Kong Stock Exchange.

Chinese firms registered overseas will need to list their ordinary shares in an international market if they plan to issue Chinese Depositary Receipts under the new mainland scheme, and Hong Kong is a natural choice, Li said while addressing a meeting of the Legislative Panel on Financial Affairs.

“For major US-listed companies that will issue CDRs in the mainland, Hong Kong can also play a role by providing certain pricing fungibility and interaction between onshore and offshore investors,” he added.

Mainland authorities announced on March 30 the official start of a CDR pilot scheme that would allow new economy companies listed overseas -- such as Alibaba Group Holding Ltd. and Tencent Holdings Ltd. -- and privately held unicorns to go public on China’s so-called A-share market.

“We are a more open, more international and more connected economy,” Li said, adding that Hong Kong is well positioned and has inherent advantages for firms looking to raise capital. “Our proposed biotech chapter will offer a unique opportunity for both China and international biotech, pharmaceutical and life science companies to list in Hong Kong.”

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Keywords: Hong Kong Stock Exchange, CDR, IPO