1H 2021 Mainland & HK IPO Markets Review & Outlook

According to the report, the Hong Kong Stock Exchange is expected to take 3rd place and Shanghai Stock Exchange 4th place in the global initial public offering (IPO) ranking, after Nasdaq and New York Stock Exchange, which will claim the top spot and 2nd place respectively as at the end of June 2021.

Hong Kong's IPO market achieved a remarkable result in 1H 2021, underscoring its position as an international financial center, including by being able to attract and complete four of 10 largest listings in the world in 1H 2021.

Chinese Mainland IPO markets resumed their robust activity again in Q2 2021, with all four markets more active than they were in 1H 2020 and a moderate acceleration in the pace of IPOs on the SSE STAR Market and ChiNext. This demonstrated the benefits of the new Securities Law and the introduction of a registration-based regime on ChiNext.

Listings by consumer and technology, media and telecommunications businesses contributed to the jump in proceeds raised in the US IPO market for Chinese companies in 1H 2021.

The two markets should continue their vibrant performance, boosted by ongoing regulatory reform efforts in 2H 2021, including the recent introduction of various new economy-stock tracking indices in Hong Kong and the registration-based regimes for the SSE STAR Market and ChiNext, which have enhanced the ecosystems for the new economy sector.

Hong Kong, in particular, is set to continue to benefit from ample liquidity and positive market sentiment supported by ongoing monetary and economic easing measures to combat the negative economic impact of the pandemic, and improvements in the economic performance of many major national economies. Mega, dual primary, secondary and spin-off listings of new economy companies are set to become highlights in Hong Kong in 2H 2021. This suggests that the Hong Kong IPO market is well positioned to meet our forecast that it will raise more than HKD200 billion in 2H 2021.

The Mainland market is anticipated to show more balanced performance among its four markets by the end of 2021. Most new listings will be on the SSE STAR Market and ChiNext. The SSE STAR Market is forecast to have about 180-210 IPOs raising about RMB130 billion-RMB170 billion; while 180-210 companies could go public on ChiNext, raising RMB110 billion-140 billion. The main boards in Shanghai and Shenzhen are likely to have about 150-180 new listings raising RMB160-200 billion.