Hong Kong retains spot as world’s top IPO market in first five months of 2016
Continued demand for financing amid new projects likely to bolster Hong Kong market’s status as key global player in near future despite global uncertainties
Hong Kong’s stock market’s recent volatile run has seen it edging close to bear territory, triggered by uncertainties over mainland China’s economic growth and the state of the global economy.
Nonetheless, Hong Kong remains the world’s top market for initial public offerings (IPO) in terms of funds raised and number of listings in the first five months of this year.
This highlights Hong Kong’s leading position in the global capital markets, says Benson Wong, assurance partner at PwC Hong Kong. “The Hong Kong IPO sector is a fund-raising platform that is facing international markets and has mainland China’s backing. China is expected to maintain a growth rate of 6 to 7 per cent. This will boost the expansion of domestic enterprises.
Their continuing demand for financing will also support Hong Kong’s IPO market.
“It is anticipated that the Shenzhen-Hong Kong Stock Connect will be launched this year and HKEX will have a profound impact on the Hong Kong stock market. This will strengthen the major role played by Hong Kong in [mainland] China’s multilayered capital markets.”
Edward Au, co-leader of national public offering group at Deloitte China, says that as of June 8, Hong Kong had raised HK$43.8 billion from 37 new listings, fuelled by three mega IPOs from Chinese financial services institutions.
“This is against 38 new listings raising HK$92.7 billion in the same period last year after all large new listings shrank across the board this year. The listing window in the first six months was disrupted by mixed expectations over the US interest rate hike, worries of an economic slowdown in China and outflow of capital from the emerging markets.
