Hong Kong IPO market continues to thrive, ranks top three

Hong Kong’s initial public offering (IPO) market is expected to raise more than HK$ 400 billion this year and rank third in the global league, with more new economy companies coming to list from Mainland China, according to the National Public Offering Group of Deloitte China.

In the first half of this year, 46 IPOs raised a total of about HKD 209.7 billion in Hong Kong, which decreased 22% in the number of new listings but increased 138% in the IPO proceeds compared to that in the same period last year.

In general, Hong Kong IPO market performed well in the first half of 2021,” said Edward Au, Deloitte South China Region managing partner. “We are confident that HKEX will get the third place of top global new listing markets in the coming half year and continue its strong performance,” he added.

In terms of total proceeds raised, Nasdaq and the New York Stock Exchange took the lead in the first half year, followed by the Hong Kong Stock Exchange and the Shanghai Stock Exchange.

Hong Kong ranked the second largest IPO market in the world in 2020, after Nasdaq, and raised about HK$ 398 billion. 

Among the top ten IPOs in the world in the first half of 2021, four were listed in Hong Kong and all of them were innovative and technologies companies, it said.

Healthcare and medical industries and property industries continued to dominate Hong Kong’s new listing market. On the first day of trading, the three best performers were from the new economy sector, with two in the health industry and one in TMT, while the three worst performers were from the property sector.

“Investors have shown more acceptance for new economy companies, but at the same time, they are less optimistic about traditional and capital-intensive sectors,” said Kinson Lau, Southern China Regional Leader of National Public Offering Group at Deloitte China.

Among the 46 IPOs, 78% were from mainland China, up from 61% a year earlier, while accounting for 96% of the total proceeds raised.

“As Hong Kong continues to build an investment and financing ecosystem for new economy enterprises and has taken shape gradually, we expect local technology unicorns to list in the second half of the year,” said Mr Au.