Hong Kong IPOs: PwC cuts 2024 fundraising prediction by 20% to US$10.2 billion
- About 80 companies could list in Hong Kong this year, raising a total of HK$80 billion (US$10.2 billion), much lower than the HK$100 billion previously anticipated, PwC says
PwC has downgraded its outlook for Hong Kong’s initial public offering (IPO) market, noting the high interest rate environment has weighed on companies’ fundraising plans.
The accounting firm said in its half-yearly report on Tuesday that it anticipates 80 companies to list on the city’s stock exchange this year, with fundraising to reach up to HK$80 billion (US$10.2 billion), significantly lower than its forecast of more than HK$100 billion in January.
The city’s new listing environment continues to be burdened by high interest rates and cautious investor sentiment, according to its report.
A total of 26 companies raised US$1.5 billion on the main board of the Hong Kong stock exchange in the first six months of the year, according to LSEG data.
“At the beginning of the year the market was quite upbeat about the Hong Kong market,” said Louis Wong, executive director of Phillip Capital Management (Hong Kong).
“Since then, lacklustre market sentiment in Hong Kong coupled with macroeconomic slowdown and growth uncertainties in China have led most [companies] to lower their expectations.”
Despite the slow start, PwC said it was “cautiously optimistic” that some activity would return in the second half. The main reason, it said, would be the anticipated flow of global capital from Europe, the United States and the Middle East to Asia, stimulated by expected interest rate cuts by major central banks. The influx of capital will increase market liquidity and valuations.
09:30
HKEX Chief Executive Bonnie Chan on building a vibrant market in Hong Kong
In addition, Hong Kong’s new Chapter 18C listing regime will attract more technology focused companies to its market, according to a PwC executive.
“The anticipated listing of Chinese concept stocks and technology companies, especially in the form of specialist technology companies, is expected to contribute to stability and confidence in the city’s capital market,” said Eddie Wong, capital markets leader at PwC Hong Kong.
The Chapter 18C listing regime will also connect high-growth technology companies with investors and the stock market, Wong added.
Hong Kong’s IPO market showed signs of a mild recovery in the second quarter, with a flurry of companies submitting listing applications, taking the listings pipeline to more than 100. Some mainland-based companies too have received the go-ahead for Hong Kong listing from the China Securities Regulatory Commission.
