Rule change in HK to usher in wave of US IPOs

Author: John Crabb | Published: 1 Aug 2018

Recent amendments to the listing rules of the Hong Kong Stock Exchange (HKEx) are set to pave the way for a number of US companies in the pharmaceutical, biotech and life sciences sectors to conduct their initial public offerings (IPOs) on the exchange as soon as September.

Under the new listing regime, these types of companies that do not meet the traditional financial eligibility tests (especially those who have not recorded revenue in the track record period) can apply to list in Hong Kong. It also permits a shorter track record period of two years as opposed to a traditional three years.

This can be viewed as something of a blowback from Alibaba’s 2014 IPO in New York, which was the largest US IPO at the time and ruffled a lot of feathers in the Asian markets. It is also indicative of HongKong’s desire to become a more international listing...