This July 4, 2018 photo shows the bronze bull sculptures outside the Hong Kong stock exchange building, Central, Hong Kong. (CALVIN NG / CHINA DAILY)
Hong Kong is expected to raise nearly HK$400 billion ($51.37 billion) in proceeds from 110 to 120 initial public offerings this year, as long as there are no major regulatory changes, the accounting firm Deloitte reported on Friday.
According to Deloitte, Hong Kong’s IPO proceeds for the first nine months of 2021 are expected to increase 37 percent to HK$288.5 billion, compared with the same period in 2020, despite a fall in volume of 26 percent from 99 IPOs. More than 60 percent of the proceeds will be from mega-deals, while most deals will be related to companies in the new economy and those with weighted voting rights structures.
We anticipate many medium and large-sized companies from the mainland would be (looking to) list in Hong Kong.
Edward Au, Deloitte China’s southern region managing partner
“The largest uncertainty still comes from the tightened regulations,” said Edward Au, Deloitte China’s southern region managing partner. “Some sectors such as education, real estate, as well as some new economy companies that handle large amount of data, were most affected.”
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Au said that Hong Kong will remain an ideal listing destination for Chinese mainland companies, especially for technology firms,as they may face more challenges and uncertainties when trying to list in the US.
“We anticipate many medium and large-sized companies from the mainland would be (looking to) list in Hong Kong,” Au added. “In the longer run, Hong Kong will become a more balanced platform for mainland companies to raise funds and support their development.”
For the first three quarters this year, the Nasdaq Stock Market continually ranked first in the amount of proceeds globally, followed by the New York Stock Exchange.
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The Shanghai Stock Exchange moved up one position into third place, mostly thanks to the massive China Telecom IPO in August, whilethe Hong Kong Stock Exchange came in fourth, according to Deloitte.
Au noted that Hong Kong is expected to rank in top three for the whole year, but there are still challenges ahead as many companies plan to list in the mainland.