HKEx Publishes Guidance Letter on Bonus Issues of Shares by listed issuers
Hong Kong Stock Exchange Publishes Guidance Letter on Bonus Issues of Shares
Background
The Stock Exchange of Hong Kong Limited (the Exchange) has published a new guidance letter HKEx-GL88-16 on the Exchange’s approach to bonus issues of shares (bonus issues) by listed issuers.
The move follows an upsurge in the number of bonus issues with a large distribution ratio by listed companies. In a number of these cases, the Exchange witnessed significant price and volume fluctuations in the trading of their shares during the ex-entitlement period. The guidance letter reminds listed issuers to properly plan their bonus issues to avoid the development of disorderly trading. Under the Listing Rules, where there is reasonable likelihood of disorderly trading for large-scale bonus issues, the Exchange may not grant listing approval. Read more