IPO queen Pamela Chung says headway needed for initial public offering connect scheme

Hong Kong's economic landscape is currently primed for progress on an IPO connect scheme, according to Pamela Chung Kong-hung, Vistra's managing director and head of its IPO & Share Registry Services. This scheme would enable mainland investors to participate in Hong Kong's initial public offerings (IPOs), broadening the investor capital pool and improving price discovery, according to Chung.

Speaking to the South China Morning Post, Chung emphasized that while the secondary market connect has been operating stably, the focus now is on enhancing market structure rather than preventing capital outflows.

Beijing's previous IPO connect scheme, the Stock Connect scheme launched in 2014, initially linked Hong Kong and Shanghai, later expanding to include Shenzhen in 2016. The scheme permitted mainland investors to purchase Hong Kong stocks and international investors to trade mainland shares via Hong Kong, with expansions to bonds, ETFs, wealth management products, and swaps.

Viewing the introduction of this scheme as the "next step to achieving a full capital market connection between the two regions," Chung sees Hong Kong and Beijing actively promoting renminbi dual-counter trading and various financial connect schemes.

Pamela Chung, with three decades of experience in investment banking, law, regulation, and high-profile IPO transactions in Hong Kong, advocates for the scheme as a crucial step. While the idea has been discussed for over a decade, Hong Kong authorities have faced resistance from Beijing. However, a turning point came in June when Financial Secretary Paul Chan confirmed ongoing talks between Hong Kong and mainland Chinese authorities to expand cross-border investment, including the possibility of allowing mainland retail investors to subscribe to Hong Kong IPOs.

In Chung's perspective, the scheme isn't about generating speculative demand or "hot IPOs"; instead, it's about strengthening Hong Kong's market infrastructure and expanding the investor base for companies raising capital, particularly those that are primarily mainland enterprises, new economy firms, or consumer-focused businesses like robotics technology companies.