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HomeBusinessChina's new plan to boost IPOs in Hong Kong faces major hurdles

China’s new plan to boost IPOs in Hong Kong faces major hurdles

China’s pledge to encourage the country’s leading companies to go public in Hong Kong is helping fuel a rare $5 trillion stock market surge, but dealmakers aren’t ready to get bullish yet.

The Hang Seng Index rose about 9% last week, its best gain since 2011, after China’s securities regulator said on April 19 it will support initial public offerings in Hong Kong. Exchange operator Hong Kong Exchanges & Clearing was among the biggest gainers, up 17%.

While a number of factors drove the index’s gains, including analysts’ bullish calls on China and an influx of mainland investors looking to hedge against a weakening yuan, the regulator’s comments sent a signal that the city is in a more favorable could expect policy to strengthen its position as a financial sector. center.

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