Hong Kong’s IPO market remains buoyant despite global and regional economic uncertainties
Positive performance of IPO market ahead of traditional peak season for listings reflects well on city’s reputation
Volatile stock markets in mainland China and signs that the country’s economy is slowing seem to have had little impact on Hong Kong’s initial public offering (IPO) market, which turned in a strong performance up to last month.
Benson Wong, IPO and assurance leader, entrepreneur group at PwC Hong Kong, says the city ranked No 1 in the world in the first eight months of this year for IPOs, thanks to the volume and funds raised.
He adds that Hong Kong’s IPO market faces challenges as a result of China’s “slowing economy”, and a weak global economy. In addition, there are nagging economic uncertainties caused by Brexit – Britain’s decision to leave the European Union – and the pace of possible US interest rate hikes.
Nonetheless, Hong Kong had a stellar year for IPOs, compared with other stock exchanges.
“We anticipate more buoyancy in IPO activity in Hong Kong for the remaining four months, especially in the fourth quarter – the traditional peak season for IPO listings. Hong Kong’s fundraising market looks poised to take the top spot in the world,” Wong says.
“For the first eight months of 2016, IPOs of financial services companies continued to lead the race, making up over 80 per cent of total funds raised on the main board. This reflects the fact that many mainland banks and financial institutions continued to actively pursue optimal timing to list in Hong Kong to raise capital and meet future development needs.
“We expect listings in Hong Kong for 2016 to continue their focus on financial services. The trend of financial services leading ahead is expected to extend from 2015 well through the whole of 2016 and will continue in 2017.”
