HK bourse shines as US-listed Chinese firms may return home

Financial analysts say the anticipated return of an unknown number mainland companies to the Hong Kong capital market for listings will enhance the city's capital-raising role and will further propel trading volume of the city's stock exchange.

"We note that the capital raising of American Depository Receipts has diminished in recent years while Hong Kong's role has increased. Furthermore, the level of trading volume in Hong Kong has also picked up materially in recent periods with the velocity almost on par with the United States," said James Wang, head of China Strategy at UBS Investment Bank Research.

Wang expects share prices of such US-listed Chinese stocks without dual listings — with higher gearing levels, negative cash flows and smaller market caps — will be most impacted by the delisting tendency.