Review of the mainland China and Hong Kong IPO markets for 2018 Q1
The Hong Kong IPO market had a robust 2018 Q1, with 62 new listings raising a combined HKD 24.4 billion, a year-on-year increase of 82 percent. In addition, KPMG has lifted its 2018 fundraising forecast to HKD 250 billion from HKD 200 billion. This is due to the expected launch of a new listing regime in Q2, which will see biotech firms and companies from emerging and innovative sectors become new growth drivers.
The Mainland China and Hong Kong 2018 Q1 IPO Review notes that total Main Board fundraising in Hong Kong nearly doubled to HKD 22.1 billion from HKD 12.1. This was the result of three sizeable deals from the banking and real estate industries.
With the conclusion of the consultation on a new listing regime for emerging and innovative companies is expected to be announced in April, KPMG anticipates the first batch of new economy IPOs could occur as early as this summer, extending the strong momentum in Hong Kong IPO market to end of 2018. KPMG forecasts Hong Kong IPO proceeds to hit HKD250 billion in 2018.
The A-share IPO market, on the other hand, experienced a slowdown in 2018 Q1. The Shanghai Stock Exchange and Shenzhen Stock Exchange recorded 38 new listings for a combined RMB 40 billion in 2018 Q1, compared to 134 IPOs and RMB 69.6 billion from a year ago. Companies from traditional sectors such as financial services continue to dominate the market.