This March 22, 2021, photo shows a general view of commercial buildings in the Central district of Hong Kong. (ANTHONY WALLACE / AFP)
Deloitte expects the Hong Kong stock market this year to be among the top three global exchanges in terms of total funds raised by IPOs, with an expected HK$450 billion (US$57.8 billion) that would surpass its 2010 record.
Deloitte predicts that 120 to 130 companies will seek IPOs in Hong Kong in 2021
The estimation was based on the rising positive sentiment among global investors, backed by the rollout of vaccination programs, the economic recovery on the Chinese mainland, and the continual trend of US-listed Chinese companies relisting in their home country, said Edward Au, southern region managing partner of Deloitte China.
The accounting firm predicts that 120 to 130 companies will seek IPOs in Hong Kong in 2021.
Buoyed by the overwhelming enthusiasm for new-economy stocks, total funds raised by IPOs in the first quarter of 2021 was HK$132.8 billion, surging eightfold year-on-year. Of that total, 88 percent was from 13 new-economy stocks at HK$117.2, skyrocketing thirty-fivefold year-on-year. Among the moneymakers, three stocks — Kuaishou, Baidu and Bilibili — generated 70 percent of the total amount, all ranking among the global’s 10 biggest IPOs in the first three months of 2021. Short-video platform Kuaishou topped the chart with HK$48.3 billion, with Baidu taking fourth place with HK23.9 billion, and Bilibili coming in sixth, Deloitte said on Wednesday.
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The homecoming of Chinese stocks is expected to continue against the backdrop of geopolitical uncertainties, Au said, while also noting the satisfying performances of such stocks. He forecasts more than 10 China concept companies, including those with weighted voting rights, will seek secondary listings in 2021, raising more than HK$100 billion.
Noting the recent correction in new-economy stocks, Au said that as the vaccines herald a transition to normalcy, mature investors expect most-sought stocks to return reasonable prices leveraged by their business operations and performances, prompting an adjustment in the portfolio. However, as the new-economy companies have demonstrated resilience during the COVID-19 pandemic, long-term investment into these stocks is expected to prevail. “The liquidity remains abundant, and therefore, new economy stocks will remain popular,” he added.