Hong Kong’s IPO pipeline fills up as Ximalaya, Xintiandi seek to list, helping city catch up with New York in global fundraising race
- Nearly a dozen firms have filed paperwork in September to go public in Hong Kong later this year
- Regulatory crackdown in China this summer has slowed the pace of new listings
Heightened regulatory scrutiny in China and the United States have caused a number of companies to take a “wait and see” approach to listings this year, but that could play in Hong Kong’s favour, said Edward Au, the co-leader of Deloitte’s national public offering group.
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The tighter listing requirements and regulatory measures “coming together may possibly result in a busy last quarter of the year for capital raising,” even if the pace of secondary listings fail to live up to expectations in the second half due to regulatory crackdowns and declining valuations, Au said.
China’s government unveiled a list of regulatory measures in July following the US$4.4 billion IPO in New York by Didi-Chuxing, a move that ignored injunctions by Chinese bureaucrats in what some described as a “deliberate act of deceit.”
Mainland China’s bourses have primarily benefited from the regulatory upheaval, with the Shanghai and Shenzen stock exchanges receiving a dozen new listings this month between them. However, the pace remains much slower than a year earlier, when the bourses, along with Shanghai’s Star Market, hosted a combined 54 debuts.
Hong Kong’s IPOs totalled US$35.6 billion so far this year, third globally behind Nasdaq’s US$60.9 billion and the US$43.7 billion on the New York Stock Exchange (NYSE), according to Refinitiv’s data.
August, traditionally a quiet month in the northern hemisphere summer, had three listings, the data showed.
Despite the slow start to September, the IPO pipeline is beginning to fill up for later this month and in the fourth quarter.
Shenzhen-based tea chain Heytea, which includes Sequoia Capital China and Hillhouse Group as investors, hired UBS for a potential US$500 million listing in Hong Kong, Bloomberg reported on Monday. UBS declined to comment on Tuesday, while Heytea did not respond to a request for comment.
Additional reporting by Georgina Lee