– Hong Kong finance world facing challenges with SPACs and tech company listings
– Suggestions to relax listing process, focus on global companies and online marketplace for investments
Well, folks, it seems like the finance world is throwing a curveball. It’s like a pitcher on a baseball field, but instead of throwing fastballs, it’s throwing SPACs. Now, don’t ask me what a SPAC is. All I know is that in Hong Kong, you need to raise at least $128 million from people who apparently know what they’re doing and find a company to buy within 24 months. Sounds simple, right? Well, not so much. The Hong Kong Exchanges and Clearing Limited (HKEX) has been standing on that metaphorical pitcher’s mound all of 2023, and not a single SPAC has left their hand.
Now, the folks over at the HKEX didn’t just sit around twiddling their thumbs. They came up with this thing called the Chapter 18C rule. It’s a fancy way of saying that if you have a tech company not making any money but is worth $1.28 billion, you can still list it. But guess what? Nobody has taken them up on that offer either. It seems that the investors in Hong Kong are a cautious bunch, and can you blame them? The Hang Seng Index, the barometer of the financial health in Hong Kong, has been on a downward spiral, going down 14% in 2023. That’s like going on a diet and losing 14% of your body weight without even trying.
You see, folks, this decline isn’t just because the investors ate something bad for lunch. It’s a cocktail of troubles, from the U.S. Federal Reserve hiking interest rates like a hiker on a mountain trail, to geopolitical tensions and economic recovery in China crawling slower than a snail on a hot sidewalk. Then there’s the real estate sector, which is adjusting like a teenager trying to figure out their outfit for the first day of school.
But don’t worry, there’s hope. Stacey Wong, president of something called the Association of Hong Kong Capital Market Practitioners, thinks the HKEX can turn things around by relaxing the listing process. Maybe give it a nice massage, some soothing music. Create a clear roadmap to listing, she says. Make that road as straight as an arrow, and maybe, just maybe, the companies will follow it. She also thinks that the HKEX should keep asking global companies to join them, like a kid inviting friends to a birthday party. And if they focus on the Middle East and Southeast Asia, they might just get more RSVPs.
Edward Au, a bigwig at Deloitte China, agrees. He thinks the HKEX should play nice with the emerging economies in the Middle East and ASEAN. But he also has another idea. He wants to set up an online platform for venture capital and private equity investments. You know, creating an online marketplace, like eBay for the big financial players. Now that’s an idea I can get behind.
So there it is folks, the financial saga of the HKEX in 2023. It may not have been a great year, but who knows what 2024 will bring. For now, I’m just going to sit back and watch the show. Who needs Netflix when you have the world of finance?