New Hong Kong Stock Exchange Policy Will Drive Hedge Prices Up – Political and Economic Code: Zhou Xian-am730

Last week, the Hong Kong Stock Exchange (388) published a consultation paper stating that the minimum profit requirement for a company’s listing has not been adequate since it was launched in 1994. It is recommended to increase the profitability requirements of the main board and to propose two solutions: Option one is to increase the profit threshold by 1.5 The second option is to increase the profit threshold by 2 times.

In fact, the Hong Kong Stock Exchange revised the minimum market value requirement from 200 million yuan to 500 million yuan as early as two years ago, but this created a problem, that is, profit adjustment does not match value adjustment. market, that is, A situation of low profits and high market value has emerged, so the above “reforms” are carried out. This is of course a very reasonable deal.

According to the Hong Kong Stock Exchange’s analysis of 745 listing applications from 2016 to 2019, it is estimated that the number of applications should be reduced by 62%, but these are mainly traditional businesses, not “new economy” industries. This reminds me of Carrie Lam’s “political stance”, when she talked about giving the green light to unprofitable biotech companies, I can’t help but think “there are only newcomers laughing, hearing old people cry “and why the government treats the new economy this way Tolerance, yet so cruel to the old economy, is really unfair.

The Hong Kong Stock Exchange will have transitional provisions for this new regulation. The effective date will not be earlier than July 1st next year. It can also be renewed once on the revised effective date. After renewal, he can continue to be evaluated, if he can be renewed, He can be considered magnanimous.

According to Chen Yiting, head of listing on the Hong Kong Stock Exchange, the new proposal will strengthen the distinction between listing on the Main Board and listing on the GEM (GEM), which is reasonable according to my critic of regulators. Although I repeat: it is good to improve the listing conditions, but at the same time we must also reduce uncertainty. As long as we are qualified, we can approve the listing. Don’t take small actions. There is too much discrete power.

Deng Shengxing, president of the Hong Kong Stock Analysts Association, believes the main measure is to prevent people from going public and I agree with this statement. However, Deng said: “If you want to be a beer shell, there is no reason to make a profit and the cost is too high to be affordable.” This is highly debatable.

If the number of new listings really goes down by 62%, in other words, the offer goes down considerably, and the cost of the listing / beer shells goes up too. With reference to the price of the domestic shell, a shell can go up to two or three billion. Unsurprisingly, the price of bullets in Hong Kong has skyrocketed multiple times – owners should be able to make a fortune again. After all, it doesn’t matter if the cost is high, as long as you can get it back. Therefore, I think Deng Shengxing’s claim is wrong, he should not be very familiar with how the beer cover market works.

The author is a novelist, newspaper publisher, stock investor, and food and beverage expert. Published every Monday, Wednesday to Friday