Recently, the Stock Exchange of Hong Kong Limited (“SEHK”) has published the New Board Concept Paper for the purpose of seeking market feedback on SEHK’s proposed establishment of a New Board. This newsletter is a brief introduction to the New Board Concept Paper.
Under the current listing framework, the Hong Kong security market has high industry concentrations and is underweight in high growth sectors, meaning that the competitiveness of HKEX as an IPO venue is facing challenge. Companies from New Economy industries (such as Biotechnology, Health Care Technology, Internet & Direct Marketing Retail, Internet Software & Services, IT Services, Software, Technology Hardware, Storage & Peripherals) that have listed on Hong Kong market in the past ten years make up only 3% of Hong Kong’s total market capitalisation, as compared with 60%, 47% and 14% for NASDAQ, NYSE and LSE, respectively. Moreover, Hong Kong security market has minimal weightings in some of the fastest growing industries globally: Pharmaceuticals, Biotechnology & Life Sciences (1%)，Healthcare Equipment & Services (1%) and Software & Services (9%, or 1% if Tencent is excluded).
