Recently, the Hong Kong Stock Exchange released a consultation paper regarding new IPO rules, mentioning a significant reduction in the public offering (retail) portion:
From a retail investor's perspective, thisIt will mean that the shares of the public offering portion are significantly compressed. The winning rate for retail investors in the IPO subscription may decrease by more than 80%.
🌰For example, if a companies IPO hammer is stable with 1 lot, under the new framework, it may take 10 hammers to hit 1 lot, and the winning rate would plummet.
❓ Is a high level of retail investor participation a good thing or a bad thing for Hong Kong stock IPOs? The more allocations given to retail investors, does it become easier to causeFell below the IPO price.？
Let's take a look at the data. We conducted a Statistics analysis of the cases in which Hong Kong stock IPOs listed from 2020 to 2024 fell below their offering prices according to the Range of adjustments and found that:It is not the case that the more retail investors subscribe, the higher the probability of falling below the offering price. On the contrary, the probability of falling below the offering price when the maximum adjustment hits the 50% mark is the lowest, and the sample size is also sufficiently large. This also confirms that active retail subscriptions do help to drive up IPO prices.
📢📢Important Reminder: The Hong Kong Stock Exchange is collecting public opinions,with a deadline of March 19.Investors can express their views and opinions to the Hong Kong Stock Exchange based on their own determination through the following methods:
1. Email expression:Send your thoughts via email, email address:consultationsupport@hkex.com.hk
2. Public consultation draft link:https://surveys.hkex.com.hk/jfe/form/SV_3UXWIOH2UljnNfU
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