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Hong Kong update – Pre-IPO Trusts and more

20 July 2020

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Alice Lau, Executive Director, Head of Private Wealth Services, at Intertrust in Hong Kong, provides an update from the region as we pass the halfway point of 2020.

It’s been a challenging first half of 2020 globally and we, in Asia, were at the forefront of the coronavirus pandemic. While we’re beginning to get back to normal, the full socioeconomic impact of the virus is far from being truly realised.

What the economy will look like in one, two, six or twelve months is impossible to predict with any certainty, but we do know that growth projections have been hit hard.

There’s good news though. China is still projected to record growth this year (a 1.2% rise in real GDP, according to the IMF)¹ and there are signs that the weight of technology companies based in Asia will be a significant aid to the region’s recovery, as the global reliance on technology continues to increase.

In the face of extraordinary disruptions, our team has remained resilient and incredibly busy throughout the first half of the year, and we’ve adapted to meet our clients’ needs, ensuring we continue to provide the high-quality service they’ve come to expect.

Number of IPOs expected to increase on HKEX

A good portion of our business activity in Hong Kong is related to IPOs, especially pre-IPO trusts, which have been increasing in popularity since the Hong Kong Stock Exchange (HKEX) introduced a range of listing reforms in 2018.

This has been further enhanced with the recent change that expands the use of dual-class shares, allowing corporate shareholders, as well as founders and key managers, to own shares with more voting rights than other shareholders.

IPO’s throughout the second half of 2020 are expected to remain strong with many tech companies exploring the possibility of listing on the HKEX as well as a number of China-based firms which are US-listed seeking a secondary listing in Hong Kong.

These trends will continue to keep our Hong Kong team busy as such listings result in greater demand for pre-IPO trusts and employee share schemes.

Five in a row at WealthBriefingAsia Awards

We do have some cause for celebration this month as we were named the ‘Best Independent Trust or Fiduciary Company – Greater China’ at the annual WealthBriefingAsia Awards.

This is the fifth year in a row that we’ve won the award and congratulations go to the whole team, whose hard work and dedication has resulted in this recognition.

To win the award once would be a fantastic achievement but to have won five in a row really is a testament to the growth we’ve achieved and the consistent high standards we’ve applied to client service.

The awards couldn’t take place as normal this year but a gala dinner is scheduled for 5 November, when hopefully we can get together with peers and friends and celebrate.

If you’d like to learn more about pre-IPO Trusts and how we can help, please get in touch.

¹ International Monetary Fund Countries – People’s ~Republic of China