Horizon Robotics’ US$700 million IPO boosts Hong Kong’s market after Beijing’s stimulus
Hong Kong’s IPO market is experiencing a surge in activity, driven by Beijing’s stimulus measures and improved investor sentiment
Hong Kong’s initial public offering (IPO) market is gearing up for a rush of deals on the back of improved investor sentiment, with Chinese autonomous-driving technology firm Horizon Robotics the latest to tap the market, seeking to raise as much as HK$5.4 billion (US$696 million).
Beijing-headquartered Horizon is one of the 16 companies that have submitted applications to list on the main board of the Hong Kong stock exchange after Beijing’s massive stimulus to rejuvenate the economy, markets and the property sector on September 24. In comparison, nine companies filed for listings in the preceding three weeks.
“We have seen increasing interest in Hong Kong IPOs from corporates since late September when the central government announced stimulus measures,” said Charlie Chen, head of Asian research at China Renaissance. “Usually, a bull market helps corporates to get better pricing in IPOs.”
Hong Kong stocks have gained 20 per cent over the past month despite uneven and shaky performance over the past few days.
The market has “overshot a little” and is entering a “stabilisation stage” with investors trying to determine the magnitude of the stimulus package, the potential impact on the real economy and the time frame, so that they can find a “fair value” for the stock market, Chen said.
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Wild swings in Hong Kong and mainland China stock markets
“At this stage, we are likely to see a lot of fluctuation in market sentiment and volatility, but overall, we see sentiment has improved and we believe it will continue to improve with more specific policy announcements to come.”
