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Capital Markets

ICBC listing: a tale of two cities

As the dust settles on the epic $21.9 billion capital-raising from Industrial and Commercial Bank of China, the long-term lessons of the deal – the first simultaneous offer on the Hong Kong and Shanghai stock exchanges – are being considered.

Hong Kong Exchanges & Clearing has confirmed to Euromoney that it has set up a working group jointly with the Shanghai Stock Exchange “to review the arrangements for simultaneous listings”.

A spokesman for HKEx paints a positive picture of what the ICBC listing achieved, saying it “further demonstrated the strength of the H-share market [Chinese entities listing in Hong Kong] in terms of fund-raising capacity” and that it “showed regulators and exchanges in Hong Kong and on the mainland are committed to cross-border cooperation”.

But he also conceded: “There may be areas where better coordination between the two markets would facilitate more efficient information flow between them – such as trade suspension in one market.”

There are, after all, complications inherent in a simultaneous listing on two markets with very different stances on international access, currency convertibility and regulatory requirement.

The big issues have to do with trading suspension, corporate information disclosure and settlement systems. The suspension issue has been a matter of concern since June, when shares of Sinopec Shanghai Petrochemical – one of 33 companies to be listed in both Hong Kong and Shanghai – were suspended from trading in Shanghai an hour before the same stock was suspended in Hong Kong.

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