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Opinion
Quality should come before quantity for Hong Kong’s IPOs
- An influx of listings with weak financial underpinnings would drive away the investors who sought refuge in the city’s stable markets
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Jeffrey Wu is a director at MindWorks Capital, a leading Hong Kong-headquartered venture capital firm specialising in technology investment across Greater China and Southeast Asia.
Hong Kong has long stood as a beacon of financial prowess, with its stock exchange often leading the world in initial public offerings (IPOs). In 2009, Hong Kong ranked as the world’s largest IPO market for the first time. A decade later, in 2019, it retained this position, buoyed by Alibaba’s significant secondary listing – a testament to the city’s financial vibrancy and its role as a gateway to global capital.
Yet, as with all golden ages, Hong Kong’s lustre is dimming. The once robust IPO market now echoes with the whispers of decline. IPO proceeds have plummeted, and the parade of high-profile listings has slowed to a trickle, mirroring Hong Kong’s broader struggle to retain its status as a global financial hub.
The numbers tell a sobering tale: in 2023, IPO proceeds fell to their lowest level in two decades, with the main board and growth enterprise market together raising only HK$46.29 billion (US$5.94 billion) by the end of the year – a dramatic 55.8 per cent decline from the previous year and less than half of Nasdaq’s US$13 billion. More concerning is that Hong Kong’s IPO market was outpaced by its mainland counterparts.
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