HK stock exchange set to be top bourse for new listings

With 15.7% share of world's IPOs, HK on track to reclaim No. 1 spot from New York

China International Capital Corp (CICC) chairman Ding Xuedong celebrating during the debut of CICC at the Hong Kong stock exchange in Hong Kong on Wednesday.
China International Capital Corp (CICC) chairman Ding Xuedong celebrating during the debut of CICC at the Hong Kong stock exchange in Hong Kong on Wednesday.PHOTO: REUTERS

HONG KONG • Four years after it lost the top spot to New York, the Hong Kong stock exchange is all set to reclaim the position as the world's leading bourse for initial public offerings.

Seventy-one companies listed in Hong Kong this year - a 15.7 per cent market share of IPOs worldwide - raising US$31.2 billion (S$43.6 billion), as much as US$1.5 billion more than the amount raised last year, according to data released by Dealogic.

At least 10 more companies are expected to list in the next few weeks.

By contrast, the New York bourse has had a lacklustre performance with just 9.8 per cent market share, raising US$19.57 billion - its lowest since 2009 - through 52 companies.

Uncertainty over the Federal Reserve's rate hike and the US economy's broader health have kept markets volatile, The Wall Street Journal reported.

Many US companies that might, in the past, have been IPO candidates have instead been bought out amid a boom in mergers and acquisitions, it reported.

Last year, 118 companies went public on the New York Stock Exchange, raising a total equity of US$74.2 billion, 74 per cent more than this year's total so far.

The tech-heavy Nasdaq market is set for its worst year since 2011, with IPOs there totalling US$17.5 billion this year.

The London market - Europe's biggest stock exchange - has been subdued too, with new listings so far at US$16.2 billion, compared with US$22.5 billion in all of last year.

Shanghai was fourth on the list this year, with US$17.1 billion raised, after regulators lifted a ban on IPOs there as part of efforts to stem the market slide.

Other Asian stock exchanges also fared well. Tokyo saw some of the world's biggest IPOs by value this year as the listings of Japan Post and its two financial units raised US$12 billion in total.

In Hong Kong, the finance sector has dominated the scene, accounting for half of the deals by value, followed by healthcare company listings. It lost last year to New York mainly due to the Alibaba Group's record US$25 billion listing, which lifted the New York market's fund-raising to US$74.2 billion, compared with Hong Kong's US$29.7 billion.

"New York beat Hong Kong last year mainly due to the Alibaba deal. The tables have been turned this year," Mr Joseph Tong Tang, executive director of Sun Hung Kai Financial, told South China Morning Post.

Mr Tong said he expects Hong Kong to remain on top of the IPO league table as many mainland firms will need to raise funds in the city.

Hong Kong could add to its leading position as companies try to list before the end of the year. Bank of Zhengzhou's US$700 million offering and Datang Environment Industry Group's US$600 million IPO are expected to be completed this month.

But overall, "a weak growth environment" has limited the number of companies looking to list globally, Mr Marshall Nicholson, head of equity capital markets for Asia ex-Japan at Nomura, told the Journal.

A version of this article appeared in the print edition of The Straits Times on December 05, 2015, with the headline 'HK stock exchange set to be top bourse for new listings'. Subscribe