Sina
Edition: CHINA ASIA USA EUROPE AFRICA
Home > HK
Thursday, June 25, 2015, 09:24

A flurry of new listings in HK and Shanghai

By Felix Gao in Hong Kong
A flurry of new listings in HK and Shanghai
The liberalization of capital accounts and interest rates, the mixed-ownership banking reform, and the imminent launch of the Shenzhen-Hong Kong Stock Connect have combined to encourage more than 10 mainland financial companies to plan to issue new shares in Hong Kong. (ASIA NEWS PHOTO)

Shanghai and Hong Kong are set to overtake New York and London at the top of the list of global IPO (initial public offering), according to a report of audit services firm Deloitte China.

The Shanghai Stock Exchange will have about 79 new listings raising a total of 103.4 billion yuan ($16.7 billion) by the end of June 30, 2015. Combining with Shenzhen Stock Exchange, the two mainland bourses will have 192 new listings raising 147.4 billion yuan, a rise of more than 200 percent from a year earlier.

"This is the strongest first half-year performance since 2011, and it follows the China Securities Regulatory Commission’s move to increase both the pace and volume of the mainland’s new offerings by approving two batches of IPO applications each month since April,” said Wu Xiaohui, leader of mainland A-share capital market for the national public offering group of Deloitte China.

"Another encouraging development is the re-emergence of large listings, which were halted on the mainland since the second half of 2012,” Wu added.

By the end of June, the Hong Kong stock market will have 46 IPOs raising HK$127.5 billion, up 57 percent from a year earlier period. Five largest IPOs in the past six months accounted for nearly 80 percent of the capital raised.

Edward Au Chun-hing, co-leader of the national public offering group at Deloitte China, said: “We are excited to see Hong Kong’s IPO market heating up in the second quarter to achieve the best interim performance since 2011. The top four IPOs underscored the importance of H share. The strong performance of H shares is testimony to Hong Kong’s strong position as a platform for mainland enterprises to connect to the international market,” he said.

Supported by a strong pipeline mainly made up of financial companies, Hong Kong is expected to maintain the strong performance in the second half of the year, bankers said.

To pave the way for the introduction of the registration-based regime for new share issuance by the end of 2015 or early 2016, the mainland’s IPO market is expected to be active. This trend should keep Shanghai in a top position globally at the end of this year, according to Deloitte.

The liberalization of capital accounts and interest rates, the mixed-ownership banking reform, and the imminent launch of the Shenzhen-Hong Kong Stock Connect have combined to encourage more than 10 mainland financial companies to plan to issue new shares in Hong Kong.

Together with the potential listings from mainland State-owned enterprises following the ownership reform, Hong Kong is expected to see at least HK$240 billion raised from 120 IPOs in 2015.

"The market is looking forward to seeing how the second-stage consultation in Hong Kong on weighted voting rights, in particular on the secondary listing of companies with weighted voting rights structures, and a Greater China ‘center of gravity’ will progress,” Au said.

felix@chinadailyhk.com

Latest News