KPMG forecasts Hong Kong IPOs to raise over HKD200 ... | KPMG | CN

KPMG forecasts Hong Kong IPOs to raise over HKD200 billion in 2014

KPMG forecasts Hong Kong IPOs to raise over HKD200 ...

KPMG forecasts funds raised via Hong Kong listings will increase to over HKD200 billion in 2014, driven by a number of sizeable deals including spin-offs from local listed companies.

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KPMG forecasts funds raised via Hong Kong listings will increase to over HKD200 billion in 2014, driven by a number of sizeable deals including spin-offs from local listed companies.

Hong Kong is expected to register IPO proceeds over HKD160 billion, with over 90 companies listed on the Hong Kong Stock Exchange in 2013. This includes listings on both the Main Board and Growth Enterprise Market (GEM) and is 78 percent higher than the HKD90 billion proceeds raised in 2012 when 60 companies newly floated their shares.

While the New York Stock Exchange has almost secured the first place in global IPO rankings in terms of funds raised in 2013, Hong Kong will be in a close race for second position, and the final ranking will depend on whether there are any sizable deals coming through on other stock exchanges by the end of the month.

Rebecca Chan, Partner, Capital Markets Group, KPMG China, says: “Year 2013 will end on a high note for the Hong Kong IPO market. There were 63 companies listed on the Main Board year-to-date, of which more than half (34) were listed during the fourth quarter. Twelve additional companies are likely to list on the Main Board before end-December and we expect the momentum to continue in 2014. The key driver for next year is expected to be a larger number of sizable deals, including large IPOs from spin-offs of local listed companies that would each raise more than HKD30 billion in proceeds.”

KPMG forecasts 100 companies will list in Hong Kong in 2014. A new wave of medium sized H-share IPOs for privately owned enterprises could be a key driver for the Hong Kong IPO market, as more companies will consider listing in Hong Kong after the China Securities Regulatory Commission (CSRC) introduced relaxed criteria, simplified examinations and approval procedures for overseas share issuance and listing of Chinese enterprises.

Mainland China’s IPO market will be re-opened in 2014 after the CSRC recently issued revised guidelines for A-share listings in November.

Roy Leung, Partner, Capital Markets Group, KPMG China, adds: ”The reforms are a sign that China is moving towards market liberalisation and internationalisation and improving the quality of new A-share listings in the long term. We do not believe that the re-opening of the A-share IPO market will have a significant impact on Hong Kong’s IPO market, at least in short term.  Each of the two markets has its own merits which appeal to different companies depending on their financing and other needs.”

In addition, the recent agreement between the CSRC and the Singapore Exchange to allow Chinese companies to list directly in Singapore may entice more Chinese companies with a strong focus in Southeast Asia to consider listing in Singapore. However it will not have a significant impact on Chinese companies listing in Hong Kong due to the difference in market characteristics.

Meanwhile, listings of international companies in Hong Kong have tapered off since 2012, however a rebound is anticipated with the Hong Kong Stock Exchange actively taking measures to attract foreign companies, such as introducing common and automatic waivers.

Chan concludes: “Taking into account the above factors, we forecast that Hong Kong IPO market activities will continue to grow for a second successive year. The determining factors of market performance lie on the success of three or four larger deals expected to come through in the year, the timing for QE tapering and the way in which this is communicated to the market, and China’s measures to further economic growth and to deal with issues such as municipal debts.”

 

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About KPMG 

KPMG is a global network of professional firms providing Audit, Tax and Advisory services.  We operate in 155 countries and have 155,000 people working in member firms around the world.  The independent member firms of the KPMG network are affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity.  Each KPMG firm is a legally distinct and separate entity and describes itself as such.

KPMG China has 16 offices in Beijing, Shanghai, Tianjin, Shenyang, Nanjing, Hangzhou, Fuzhou, Xiamen, Qingdao, Guangzhou, Shenzhen, Chengdu, Chongqing, Foshan, Hong Kong SAR and Macau SAR, with around 9,000 people. 

KPMG China refers to the member firms of KPMG International in Mainland China, Hong Kong SAR and Macau SAR.

 

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