Doomsayers receive a real slap in the face — again
Instead of asking people “Have you eaten?”, a catchphrase for Hong Kong people to make small talk lately is, “Have you subscribed to the IPO for JD.com?”
According to official figures by Hong Kong Exchanges and Clearing Ltd, JD was oversubscribed by about 180 times. It has frozen about HK$280.7 billion ($36.2 billion), breaking the record this year set by a mainland tech predecessor. Days before JD, the secondary listing of Chinese mobile game publisher NetEase, the world’s second-largest such business, in early June was oversubscribed by 360 times by retail investors. NetEase has frozen about HK$230 billion for the IPO.
But JD’s record is expected to be broken by Kangji Medical, a major medical equipment producer on the mainland that sells disposable and reusable trocars and other products.
Homecoming listings of Chinese mainland companies, prompted by the US’ hostile regulatory environment, have made Hong Kong one of the biggest winners. Many have turned their focus back on the Pearl of the Orient, despite doubts that arose about the city’s ability to retain the crown of “top IPO destination in the world” after the city became embroiled in incessant street violence that began in June 2019.
As a matter of fact, Hong Kong, a major international finance center, has always been and is certainly one of the most sought-after destinations for companies to raise funds through initial public offerings, or IPOs. It has been years since many in the city, some of whom do not even have sufficient knowledge of the stock market, to see participating in the IPO game as a way to make a quick buck. And such opportunities have become more precious and welcome after the city’s economy was hard hit by yearlong street violence and the COVID-19 pandemic. The margin lending programs rolled out by stockbrokers fueled the craze. Many would borrow money from brokers in order to guarantee they would be allocated a lot of shares.
The IPO boom and bullish market sentiment is a slap in the face of those doomsayers who have kept predicting Hong Kong’s doom since 1997. Over the past year, they have been spouting gloom and doom again and again after the SAR government proposed an extraditionlaw amendment bill to seek justice for a pregnant Hong Kong woman who was allegedly murdered by her boyfriend in Taiwan. They said if the amendment bill were to pass, it would spell the end of Hong Kong. And now those doomsayers are repeating the same old song and dance with the new national security law for Hong Kong.
The doomsayers, however, were once again proved wrong by the reality. They have failed to see that Hong Kong has had strong backing from the Chinese mainland, particularly since its return to China in 1997. Over the past four decades, the mainland has grown even stronger, with the world’s largest market and the most-vibrant economy. It empowers Hong Kong to be a financial hub that would not be defeated so easily.
The financial crisis in 1998 couldn’t defeat Hong Kong. Nor could the SARS pandemic in 2003. The implementation of the new national security law for Hong Kong will in no way compromise Hong Kong’s status as an international financial hub.
People always say time will give you the answer that you want. In this case, time will tell those doomsayers that they are wrong again. Hong Kong will continue to shine, with the strongest support from the Chinese mainland. Those who wish for the “demise of Hong Kong” are not people who truly put Hong Kong’s best interests in mind.