Review of the mainland China and Hong Kong IPO markets in 2019, and outlook for 2020
The Hong Kong bourse once again ranked first globally in terms of IPO proceeds, at a time of global uncertainties, cementing its position as the world’s leading IPO hub.
By the end of 2019, Hong Kong will have completed 160 IPOs, raising a total of HKD 307.8 billion, with a historical high of 145 new Main Board listings. The results were largely driven by a strong performance in the second half of the year, highlighted by two mega-sized deals: Alibaba’s secondary listing and the listing of Budweiser Brewing Company.
In mainland China, the successful launch of the STAR Market, targeting high-tech and innovative companies, helped the fundraising in A-share market hit an eight-year high, with a combined RMB 251.9 billion raised from 200 new listings by the end of 2019. In addition, Shenzhen’s ChiNext board is expected to apply a registration-based reform following the Star Market’s success, enhancing the diversity, transparency and competitiveness of the Chinese capital market.
Despite global IPO markets seeing a slight decrease in proceeds and investors being more cautious with their sector selection amid increased economic uncertainty, the Hong Kong IPO market is poised to stay competitive in the coming year. New Economy and international listings are expected to remain key drivers of the Hong Kong IPO market. Alibaba’s successful secondary listing could prompt other mega-sized Chinese technology companies currently listed overseas to consider returning to Hong Kong.
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