Hong Kong IPOs to underpin blockbuster week in Asia as ‘animal spirits’ return

Asia’s stock markets are gearing up for their busiest week of new listings in more than two years, offering a crucial test of demand as companies rush to raise money before the US election.

Around 20 companies from Asia-Pacific are listing shares through Friday in deals that may raise as much as US$8.3 billion,HK$64.7 billion), the biggest week since April 2022, according to data compiled by Bloomberg. The supply includes deals from China, India and Japan, underscoring the broad revival across the region.

“There is a level of animal spirits returning to the Asia market,” said Matthew Emsley, a partner at Herbert Smith Freehills in Hong Kong who works on initial public offerings (IPOs), using a term for changes in market behaviour that are often driven by emotions. “There is an increased level of activity and urgency to take advantage of that positivity.”

The performance of the newly listed shares will be keenly watched by bankers planning to bring a spree of equity offerings in Asia over the next few weeks, as companies and major shareholders attempt to close deals before the November 5 election in the US.

Bottled-water maker China Resources Beverage Holdings and autonomous-driving technology firm Horizon Robotics are set to debut in Hong Kong on Wednesday and Thursday, respectively, raising more than US$1.3 billion between them. Their success may spark a broader revival of Chinese IPOs in Hong Kong.

“We are likely witnessing the initial stage of a recovery in the Hong Kong and China capital markets,” said Cathy Zhang, head of Asia equity capital markets at Morgan Stanley. “We need more larger, high-quality companies to list in Hong Kong and continue to perform well to ensure that this trend is sustainable.”