Hong Kong is not the first stock exchange to eye rule changes to make it look more like the US. But its latest move — allowing all companies to file confidentially for an initial public offering — looks particularly fruitless. While the Asian hub measures itself against New York, it’s Shanghai and Shenzhen that are its real competition.
On Friday, the city’s market operator said it would let IPO candidates file prospectuses behind closed doors, meaning any adjustments requested by the regulator happen before the public gets a look. Previously, only certain high-growth tech and biotechnology groups enjoyed that privilege. Now, so will any companies joining the 534 in Hong Kong’s official IPO queue.
Filing in public can bring some uncomfortable rough and tumble. In the US, shoemaker Allbirds was forced by the Securities and Exchange Commission to remove its claim to be the world’s first sustainable IPO in 2021. That said, investors may be better off for the insights into a company’s culture that such changes convey.