HK Exchange Putting its Reputation at Risk, Warn Critics

The Hong Kong stock exchange, the world's top initial public offering market last year with more than US$30 billion in new listings, is being accused of sacrificing quality for quantity after its controversial approval of Russian aluminium giant Rusal's share sale and a string of listing debacles.

 

"It was quite a surprise that the SFC agreed to Rusal's listing," Raymond Chan, the acting director of the Centre for Corporate Governance and Financial Policy at Baptist University, told the South China Morning Post. "Listing in Hong Kong would be associated with low quality."

 

Chan told the Post that Hong Kong was perceived as a good place to list because of the lighter regulatory touch. "But the transparency and disclosure in Hong Kong are less stringent than in most Western exchanges. We need to improve that to get the same standard as other exchanges."

 

Concern over the issue grew after a string of mainland companies shocked the market with less-than-full disclosure last year, says the Post.

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