Deloitte expects Hong Kong to see a sharp rise in the number of new listings but a drop in the IPO funds raised year-over-year. The surge in the number of IPOs on the Growth Enterprise Market (GEM) and the overall reduced offering scale of the mega IPOs contributed to this year's phenomenon. Hong Kong's IPO market has clearly diversified in its role not just as a preferred listing destination for blue-chips and large Chinese business or state-owned enterprises but also a fundraising venue for potentially high-growth local and international small-and-medium enterprises (SMEs). The strong enthusiasm from the local and international SMEs to tap Hong Kong’s bullish market this year for growth and development has boosted IPO debuts on and a long listing application pipeline for the GEM.
At the same time, for the year-to-date to the end of the third quarter the A-share IPO market is likely to present a remarkable increase in the number of new listings and proceeds. As larger issuers continued to take the Main Board as a listing venue, the Shanghai Stock Exchange is expected to remain the largest Chinese IPO market.
Deloitte foresees another one to two large IPOs from the technology sector to complete in Hong Kong before the end of the year. As the IPO review and approval process on the Mainland continues to present uncertainties for some applications, the likelihood of certain larger property developers and banks to go public in the remaining three months there may be small. Driven by a steady stream of at least 30 IPO debuts each month, China’s A-share IPO market may see a new record in the number of IPOs under the existing regulated IPO activities. We, therefore, believe the current ranking for the top three stock exchanges may remain unchanged for the remainder of this year.
The attainment of a level of IPO proceedings of approximately HK$130 billion-150 billion for 2017 is still subject to factors including favorable global macroeconomic conditions such as expectation over a potential delay in the timetable of U.S. interest rate hikes, U.S. tax reform, and China's 19th Communist Party Congress and whether another huge IPO is completed before the end of year.
As for the outlook of Mainland's new listing market, the trends that were observed in the previous quarters are likely to be maintained moving forward. These include the dominance of small and medium manufacturing and technology companies in terms of the number of upcoming new listings and fast pace of IPOs under the existing regulatory regime.
For more details, please read the report's press release or download the report that was issued on 21 September 2017 from our website.
Deloitte China is committed to becoming your trusted business partner. If you need any counsel related to IPO, please do not hesitate to reach out to our IPO experts from our National Public Offering Group.
Edward Au
Co-Leader
Tel：+852 2852 1266/ +86 755 3353 8075
Fax：+852 2815 8476/ +86 755 8246 3186
Email：[email protected]
Dick Kay
Co-Leader
Tel：+86 21 6141 1838
Fax：+86 21 6335 0177
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Anthony Wu
China's A-Share Market Capital Leader
Tel：+86 21 6141 1808
Fax: +86 21 6335 0177/0377
Email：[email protected]
Jay Harrison
U.S. Capital Market Leader
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Fax：+852 2527 3036
Email：[email protected]
Taylor Lam
Leader of Northern China Region
Tel：+86 10 8520 7126
Fax：+86 10 85207494
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Jon Peng
Leader of Western China Region
Tel：+86 23 8823 1257
Fax: +86 23 8823 1259
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For details of upcoming activities of the National POG, please contact our Program Senior Manager, Bonita Chan (Tel: +852 2852 1679, email: [email protected]), or Program Assistant Manager, Dora Yu (Tel:+86 21 6141 2451, [email protected]).
