KPMG forecasts 110 companies with fund raised will list on the Hong Kong Stock Exchange in 2015.
Funds raised via initial public offerings in Hong Kong are likely to exceed HKD200 billion in 2015, with sizeable deals from financial services, and additionally deals in pharmaceutical and environment-related sectors, according to KPMG analysis.
KPMG forecasts 110 companies with fund raised will list on the Hong Kong Stock Exchange in 2015. Listing candidates from the financial services sector will be a key focus, including Chinese banks and insurers.
By end-2014, KPMG expects to see 109 companies listing on the Hong Kong Stock Exchange – the highest in a decade – with IPO proceeds reaching HKD225 billion. This is 33 percent higher than the HKD169 billion proceeds recorded in 2013 when 97 IPOs with fund raised were completed.
The result is likely to allow Hong Kong to secure second place in global IPO rankings in terms of funds raised in 2014, following the New York Stock Exchange.
Rebecca Chan, Partner and Head of Hong Kong Capital Markets Group, KPMG China, says: “With several sizeable IPO deals set to complete by the end of 2014, proceeds in December alone may reach HKD84 billion, slightly higher than the HKD82 billion registered in the first half of 2014. We expect market sentiment will remain positive and IPO activities to stay buoyant, underpinned by a strong pipeline.”
A number of financial asset management companies are also expected to list in Hong Kong. Meanwhile, in terms of the Shanghai-Hong Kong Stock Connect launched in November, longer term benefits are expected to materialise.
Louis Lau, Partner, Hong Kong Capital Markets Group, KPMG China, explains: “The scheme is a big step forward for the internationalisation of Renminbi. Hong Kong’s position as a gateway to investment in China has been reinforced with this scheme. The integration of China's A-share market and the Hong Kong stock market could eventually make them one of the world's largest and most active stock markets.”
A challenge for Hong Kong is whether different shareholder structures should be permitted other than the “one share one vote” structure, which has been in place since 1989. KPMG’s view is that the market is moving in the right direction by allowing investors and market participants to express their views and re-examining the existing rules and practices.
Chan concludes: “With China’s continued efforts to support the economy through stimulus measures and the recovery in the US, Hong Kong’s IPO market activities in 2015 will remain strong and funds raised can be sustained at the current level. Market performance will depend on whether the anticipated sizeable deals come through.”
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