Hong Kong stock exchange bows to tech giants

As a sop to the next Alibaba, Hong Kong toys with the long-standing principle of equal votes for shares.

Ever since Hong Kong lost the massive Alibaba flotation to New York last year, the territory's 10has been determined not to let such a big fish escape again. So it recently launched a consultation on ditching a long-standing principle: that all shares should carry equal votes.

Founder Jack Ma and other insiders control Alibaba without a majority of the votes, and the bourse is wondering whether admitting firms with so-called dual-class shares whereby not all shareholders are equal is the best way to ensure it gets its fair share of future Chinese tech giants to list there.

Good grief, says Robert Boxwell on scmp.com. Does anyone really think "investors need less protection, not more, from the self-proclaimed genius founders of tech companies"? Fund managers have told the exchange that voting rights should remain proportionate to the share of the company, so there is now talk of a possible compromise, says Peter Thal Larsen on breakingviews.com.

Companies wanting to give some shareholders extra say as Google and Facebook do will have to be listing for the first time and accept stricter scrutiny of the board. "The effect is a bit like raising the speed limit on motorways, but only applying the change to large, new cars fitted with extra airbags." However, the Hong Kong market should think again."The willingness to bend established rules jeopardises [its] position."

Recommended

I wish I knew what an emerging market was, but I’m too embarrassed to ask
Too embarrassed to ask

I wish I knew what an emerging market was, but I’m too embarrassed to ask

This week's “too embarrassed to ask” explains what emerging markets are, and why you might want to invest in them.
9 Sep 2020
Bullish investors return to emerging markets
Stockmarkets

Bullish investors return to emerging markets

The ink had barely dried on the US-China trade deal before the bulls began pouring into emerging markets.
27 Jan 2020
Beware the hidden risks when investing in emerging markets
Investment strategy

Beware the hidden risks when investing in emerging markets

Emerging markets look cheap compared with developed countries, but earnings may be less trustworthy.
23 Dec 2019
The British equity market is shrinking
Stockmarkets

The British equity market is shrinking

British startups are abandoning public stockmarkets and turning to deep-pocketed Silicon Valley venture capitalists for their investment needs.
8 Nov 2019

Most Popular

Will a second wave of Covid lead to another stockmarket crash?
Stockmarkets

Will a second wave of Covid lead to another stockmarket crash?

Can we expect to see another lockdown like in March, and what will that mean for your money? John Stepek explains.
18 Sep 2020
Here’s why you really should own at least some bitcoin
Bitcoin

Here’s why you really should own at least some bitcoin

While bitcoin is having a quiet year – at least in relative terms – its potential to become the default cash system for the internet is undiminished, …
16 Sep 2020
James Ferguson: How bad data is driving fear of a second wave of Covid-19
UK Economy

James Ferguson: How bad data is driving fear of a second wave of Covid-19

Merryn and John talk to MoneyWeek regular James Ferguson about the rise in infections in coronavirus and what the data is really telling us.
17 Sep 2020