Hong Kong’s dry spell of IPOs slashes first-quarter fundraising by 90 per cent, pulls city’s global ranking down to sixth place
- Hong Kong’s main board saw 11 companies raise US$1.72 billion, the lowest since the first quarter of 2013, according to Refinitiv
- JL Mag Rare-Earth, which raised US$544.6 million in January, was the city’s largest IPO in the first quarter but only ranked 11th worldwide
Funds raised from new share listings in Hong Kong sank 90 per cent year-on-year in the first quarter, pushing the city to sixth place in the global rankings for initial public offerings (IPOs), but some analysts expect a rebound later this year.
Hong Kong’s main board saw 11 companies raise US$1.72 billion, the lowest since the first quarter of 2013, according to Refinitiv data as of March 28.
IPOs in the city have dried up over the last six months because of China’s technology crackdown, with offerings in the first quarter hit further by Hong Kong’s ongoing coronavirus outbreak.
However, Hong Kong Exchanges and Clearing chief executive Nicolas Aguzin remains positive. He said on Tuesday that the bourse operator had over 170 listing applications. Accounting firms KPMG and EY said they were also confident of IPOs returning later this year.
“In many parts of Asia-Pacific, the Covid-19 pandemic is still impacting the economy and IPO activity,” said Ringo Choi, IPO leader for Asia-Pacific at EY. “There is, however, optimism of more IPO activity to come in the second half of the year.”
Louis Lau, partner of capital markets at KPMG China, said Hong Kong stock exchange’s plan to undertake further listing reforms to allow pre-revenue tech giants to list here would attract high-quality tech firms to list.
Top 10 Stock Exchanges
| Rank | Stock Exchange | Proceeds(USD M) | Market Share | No. of New Listings |
| 1 | Korea | 10,749.4 | 27.3 | 1 |
| 2 | Shenzhen ChiNext | 7,645.5 | 19.4 | 33 |
| 3 | Shanghai Star Market | 6,056.5 | 15.4 | 24 |
| 4 | Saudi | 3,226.9 | 8.2 | 6 |
| 5 | Nasdaq | 2,193.8 | 5.6 | 21 |
| 6 | Hong Kong main board | 1,724.1 | 4.4 | 11 |
| 7 | Oslo | 1,110.1 | 2.8 | 2 |
| 8 | Shanghai main board | 1,109.2 | 2.8 | 10 |
| 9 | National Stock Exchange | 1,014.1 | 2.6 | 12 |
| 10 | The Bombay Stock Exchange | 1,009.7 | 2.6 | 13 |
| Total | 39,344.8 | 279 |
Source : Refinitiv
“Easing the listing requirements, while keeping investor protection in balance, should make Hong Kong’s capital markets increasingly attractive to high-growth and innovative companies from China and other regions,” Lau said.
