Hong Kong sees uptick in IPO applications year to date with interest rates poised to decline, HKEX CEO says

Hong Kong has received 30 per cent more applications for initial public offerings (IPO) year to date than in the same period a year ago, as more start-ups seek to raise capital with interest rates poised to decline, indicating a turnaround in the market.

“We have about 30 new IPO applications year to date,” and the pipeline including renewals rose to almost 40, said Bonnie Chan Yiting, in her first media briefing since taking over as chief executive of Hong Kong Exchanges and Clearing (HKEX) on March 1. “Companies are still very interested in pursuing a listing in Hong Kong.”

Chan, formerly co-chief operating officer of the bourse operator, took over from Nicolas Aguzin. Her appointment came at a tough time, as both market turnover and new listings dropped last year due to high interest rates and rising geopolitical tensions.

Daily turnover in stocks tumbled 16 per cent to HK$105 billion (US$13.4 billion) in 2023, exchange data showed. The proceeds arising from stock offerings of newly-listed companies fell by more than half to a 20-year low of US$5.9 billion in 2023, based on Refinitiv data.

“We have seen positive signs in the stock market over the past two months,” said Chan, pointing out that the amount international investors invest in the mainland market through the northbound stock connect rose to 130 billion yuan (US$18.08 billion) on average per day in the first two months this year, up about 40 per cent.

“This shows that international investors still want to invest in the potential growth of the China story,” she said. “We have been working very hard on attracting more companies to list in our market and more investors to participate in our market.”