KPMG’s analysis and review of the mainland China and Hong Kong IPO markets in 2020 Q1
While global IPO momentum has been disrupted due to the ongoing pandemic, fundamentals in Hong Kong and mainland China IPO markets remain steady overall. The number of IPOs in Hong Kong in the first quarter increased compared with the same period last year, as positive sentiment carried over from late 2019. However, as the COVID-19 outbreak persists, volatility in the economy might impact IPO activity volume, deal valuations and access to capital at least in the short term until the situation improves, according to KPMG’s analysis.
Global funds raised have increased by 54 percent compared to the same period last year despite market uncertainties. The US, mainland China and Hong Kong remained key contributors to the IPO market globally in the first quarter. The Hong Kong Stock Exchange placed fifth in terms of funds raised, while the Shanghai Stock Exchange claimed the top spot due to a sizeable listing and the continuing popularity of the STAR Market.
The Main Board recorded 35 new listings for a combined HKD 14.1 billion during the quarter. The number of completed Main Board IPOs is higher than the same period for the past five years. However, funds raised decreased approximately 32 percent in the first quarter compared with the same period last year due to a lack of sizeable deals.
The A-share market is expected to complete 53 new listings for a combined RMB 80.6 billion in the first quarter, representing a 217 percent increase in terms of funds raised when compared to the same period last year. The strong performance is due to the sizeable listing of Beijing-Shanghai High Speed Railway and the continuing popularity of the STAR Market as an IPO venue.
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