According to a recent report, Hong Kong has won back it’s crown as the world’s top IPO market in 2018; a result of the, in large part, of the debuts by major Chinese technology companies won amid fierce global competition.
Fundraising through initial public offerings on the Hong Kong Stock Exchange looks to reach US$36.6 billion this year, 120% more than in 2017, according to a multinational professional services network.
The New York Stock Exchange, which topped the list last year, appears headed for second place with US$28.8 billion, followed by the Tokyo Stock Exchange at US$26.2 billion.
A record 208 businesses are debuting in Hong Kong this year, including a major Chinese smartphone maker and a food delivery-to-ticketing services platform. Of the 133 IPOs on the main board, 36 are by “new economy” companies in high-growth tech fields, according to KPMG.
The boom was fuelled partly by changes to Hong Kong’s listing rules in April 2018.
The smartphone maker, for example, became the first company with multiple classes of shares carrying different voting rights – an increasingly popular structure among tech companies – to list on the exchange.
Many of 2018’s biggest IPOs came from Asian companies.
For example, a Japanese multinational holding conglomerate’s mobile unit, which debuted in Tokyo recently, topped the global list at US$21.1 billion, followed by the world’s largest telecoms tower operator with US$7.5 billion and the smartphone marker’s US$5.4 billion.
Next, a communications equipment manufacturing company and an electronics industry company, ranked high on the list as well.
Exchanges worldwide are vying to attract big tech IPOs, which tend to draw considerable interest from investors.
An online video portal, an e-commerce platform, and a music streaming service – which are all China-based companies – listed in the U.S. this year.
As for 2019, researchers at the professional services network the expect about 200 companies to debut in Hong Kong, raising up to HK$230 billion (US$29.4 billion).
While stock prices have flagged of late, many promising companies are waiting in the wings to go public.
Another report noted that Hong Kong had help the title of top IPO market for two consecutive years.
The report noted that more than 70 percent of the funds raised come from mainland enterprises, many of which chose to make their market debuts in Hong Kong to take advantage of the city’s revolutionary listing rule changes.
Since Hong Kong Exchanges and Clearing Ltd－the operator of Asia’s third-largest stock exchange－allowed technology firms with dual class share structures to go public in the city in April 2018, a total of 22 new economy companies from the mainland have listed in Hong Kong, according to the assistant vice-president of mainland development at HKEx.
The Hong Kong stock exchange, together with its United States counterparts, are expected to remain strong in the coming year, retaining their allure as go-to destinations for promising technology superstars from the mainland, according to a recent report from a major law firm.
With more than 200 firms lining up for floats in Hong Kong, IPOs are set to rake in as much as HK$230 billion over the coming 12 months.
Companies from the tech, media and telecommunication sector will continue to be the major driving force, a professional service company forecasts.