Few years ago, Hong Kong’s penny stocks were hotly speculated, and shell stocks were frequently traded. Therefore, the Hong Kong Stock Exchange (HKEX) formulated various regulations to suppress transactions that affect the market. Nowadays, the growth of penny stock market is stagnated, and the listing of new IPOs are also deterred, even those listed stocks are also facing risk of being delisted. At the same time, the transformation through acquisitions is strictly monitored by the regulatory authority.
Our Audit and Assurance Practicing Director and Head of IPO, Paul She, recently interviewed by Sing Tao Daily and expressed his view on the regulations of Hong Kong Stock Exchange on penny stocks and shell trading. Paul mentioned “Banks in Hong Kong are conservative in general, and real estate mortgage is one of the requirements of bank loans. If SMEs encounter difficulties in the IPOs, their business development will be vigorously hampered due to the lack of other financing strategies.” he added “the market price of shell is just an intangible asset which has no effect on shareholders and should not be deliberately crack down by the regulatory authority.”
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Credits: Mickey Lau from Sing Tao daily (19 November 2021 issue)