FOR Hong Kong stock exchange head Charles Li, losing what may be the biggest Internet offering in Chinese history shows the market needs to change its ways as it seeks to be the investment gateway to the world’s second-biggest economy.

    “We need to ensure our markets continue to be relevant in the new era of economic development,” Hong Kong Exchanges & Clearing Ltd. chief executive officer Li said in a statement yesterday, after Alibaba Group Holding Ltd. unveiled plans to sell shares in the United States.

    “We are proud of our tradition of respect for the rule of law and adherence to principles. However, we also need to find ways to make our market more responsive and competitive, particularly with respect to new economy or technology firms.”

    Alibaba had struggled to persuade Hong Kong’s regulators to approve its proposed governance structure. Brokering a compromise would have been a coup for Hong Kong Exchanges.

    “Alibaba is an amazing prospect and to be losing something of that size does show that maybe the overregulation in Hong Kong is detrimental,” said Evan Lucas, Melbourne-based market strategist at trading services provider IG Ltd. “Hong Kong is very much about protecting the credibility of its market. They are very, very stringent.” (SD-Agencies)