City bourse expected to see 120 new listings this year, with total funds to be raised hitting HK$250 billion

Despite being seen to be gradually losing its competitiveness as emerging regional rivals give the city a run for its money, Hong Kong is determined to be a force to be reckoned with, with experts predicting that the SAR is set to oust Shanghai and New York to become the world's largest initial public offering (IPO) hub this year.

The Hong Kong Stock Exchange is likely to see up to 120 new listings, spearheaded by mainland enterprises, in 2015, with total funds to be raised breaching the HK$250-billion mark, taking the city to the top spot in the global IPO rankings.

The IPO market will be led by Chinese mainland financial-services providers, according to international accounting firm PricewaterhouseCoopers (PwC). "In the second half of this year, three or four finance companies will seek to raise HK$10 billion each in the Hong Kong market," said Edmond Chan Chiu-kong, co-head of capital market services at PwC Hong Kong.

Deloitte - another member of the "Big Four" club of global professional-services firms - expects more than 10 major IPOs in Hong Kong later in the year, with each raising HK$10 billion. Most of the companies hail from the financial sector, including the mainland's first investment bank China International Capital Corp Ltd; China Huarong Asset Management Company Ltd, the country's biggest bad-debt manager; and China Reinsurance (Group) Corp. All of them have already revealed their intention to float in the SAR in the second half of 2015.

Apart from the financial sector, medical services and pharmaceutical-related firms, as well the retail and new energy industries, are expected to be major players on the local IPO scene, Chan said.

A recent report by KPMG shows that a number of mainland financial-services providers, including securities brokerages, insurers and asset management firms, also plan to launch large IPOs here in the coming months.

The report stressed that IPO deals in the pharmaceutical and environment-related sectors will be popular on the local bourse.

"Positive measures, such as the Hong Kong-mainland mutual fund recognition plan and the upcoming Shenzhen-Hong Kong Stock Connect program, will enhance the performance of Hong Kong's capital market in the second half of the year," said Chan.

The endless queue of mainland listings has driven some companies to make their IPO debut in the SAR, he added.

In the first half of this year, Hong Kong had already topped the list for the total amount of IPO funds raised globally, with Shanghai coming in a close second. Hong Kong saw 51 new listings - almost the same for the corresponding period last year. But, total funds raised soared by a whopping 58 percent to HK$129.4 billion.

The retail, consumer goods and services sectors made up the bulk of the new listings in the first half of 2015, followed by industrial products, financial services, IT and energy, as well as mining-related companies. Small- and medium-sized enterprises continued to dominate IPO activities during the period.

The Hang Seng Index added 0.12 percent at the close of trading on Thursday.

celia@chinadailyhk.com

The retail, consumer goods and services sectors made up the bulk of the new listings in the SAR in the first half of 2015, followed by industrial products, financial services, IT and energy, as well as mining-related companies. Asia News Photo

(HK Edition 07/03/2015 page8)