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Nikkei Markets

Hong Kong's IPO Market Poised To Be Top Fundraiser In 2018, PwC Says

By Carrie Chen
Nikkei Markets
HONG KONG (Jan 02) -- Fundraising in Hong Kong's initial public offering market is poised to be the largest in the world in 2018, bolstered by rescheduled offerings from last year and bets that listing reforms in the city will lure more companies, PricewaterhouseCoopers said.

Global consulting company PwC expects 150 companies to list in Hong Kong during 2018, raising between HK$200 billion ($25.6 billion) and HK$250 billion. This compares to a record 174 listings on the stock exchange's main board and the growth enterprise market board for smaller companies in 2017. Total funds raised last year came in at HK$128.2 billion, 34% lower than 2016, hurt by a lack of "mega-sized" IPOs, PwC said. It also cited some large-scaled offerings being rescheduled for 2018 as a reason for the decline.

The consulting firm expects that raising the main and GEM board's market capitalization thresholds will help define positions of the two boards more clearly. "We believe the proposed dual-class share structures will help the Hong Kong market to attract new economy enterprises to come to Hong Kong for fundraising and enhance the diversification of Hong Kong's capital market," said Benson Wong, entrepreneur group leader for PwC in Hong Kong.

Last month, Hong Kong's stock exchange said companies with a market capitalization of at least HK$10 billion will be eligible for listing shares with different voting rights. This came after the exchange had in June invited views on a proposal for a new board that would allow dual-class share structures.

In 2017, four of the 10 largest IPOs in Hong Kong were from so-called 'new economy' companies, which are focused on technology and internet-based businesses. In September, online insurer ZhongAn Online P&C Insurance raised about $1.5 billion from an IPO, while Tencent Holdings's online publishing unit China Literature's $1.1 billion offering was over-subscribed several times over in November.

PwC's Wong expects about 40% of the IPOs in 2018 to be from new economy companies. However, he said there won't be "a lot" of companies with the dual share structure listing this year, with more expected next year.
- By Carrie Chen; carrie.chen@NikkeiNewsrise.com; +85239605153
- Edited by Suzannah Benjamin
- Send Feedback to feedback@NikkeiNewsRise.com
- Copyright (c) 2017 Nikkei NewsRise Asia Pte Ltd.

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