When Hong Kong unveiled plans last year to encourage biotech companies to list in the city by loosening listing rules, the financial industry and investors cheered.
Hong Kong was an obvious financing centre for a growing number of Chinese companies developing new drugs. But as the new rules come into effect Monday, at least one problem has become evident: Hong Kong’s limited expertise in the biotech field.
Biotech companies without revenues, let alone profits, will now be allowed to apply for listings in the city under the new rules. Some 10 companies - mostly Chinese, including the Temasek-backed Innovent Biologics and Shanghai Henlius Biotech - are already planning floats and some have dropped US IPO plans in favour of listing closer to home.
The result however is a scramble for experts in a city whose financiers have limited experience with science, reports Reuters.
Just 3 per cent of all Hong Kong-listed stocks, by capitalisation, come from so-called “new economy” sectors - tech as well as biotech - according to a report last year by Hong Kong Exchanges and Clearing, the bourse operator.