The Hindu Business Line : HKEx may allow listing of depository receipts

Hong Kong Exchanges and Clearing Ltd (HKEx) is looking to introduce a framework that would enable issuers to list depository receipts on the stock exchange here.

“Our listing department is studying the possible introduction of Hong Kong depository receipts. When introduced, this would give more opportunities for companies from other jurisdictions to raise capital here,” a HKEx official said.

Fund Raising

Large companies from other jurisdictions could also look at making secondary offering here through depository receipts. Hong Kong in the year 2006 was the world’s second largest fund raising centre, with companies raising $43 billion here in that year through the initial public offering (IPO) route.

On possible significant co-operation with other stock exchanges, including those in India, the HKEx official said that the HKEx was open to talks on taking a stake in other exchanges, but added that no merger and acquisition (M&A) proposals were on the table.

“There are no negotiations or agreements relating to intended acquisitions, mergers or realisations of similar nature between HKEx and other exchanges,” the official said, adding that any form of co-operation would have to be clearly beneficial to all the parties concerned. It was also pointed out that shareholdings of 5 per cent or more in HKEx are subject to the Hong Kong Government approval.

Strategic Asset

Meanwhile, the Hong Kong Special Administrative Region (HKSAR) Government had recently notified the HKEx that it had increased its shareholding in the company to beyond 5 per cent of the issued capital.

The shareholding of HKSAR Government in HKEx is being held through an Exchange Fund and now stands at 5.88 per cent.

The Exchange Fund would retain this holding as a strategic asset in support of the maintenance of Hong Kong as an international financial centre, sources familiar with the development said.