2015 Review and 2016 Outlook of Hong Kong and Chinese Mainland IPO Markets
In the ‘2015 Review and 2016 Outlook of Hong Kong and Chinese Mainland IPO Markets’ report released by the National Public Offering Group of Deloitte China, it is expected that Hong Kong, Shanghai and Shenzhen to emerge as the first, third and eighth largest bourses for initial public offering (IPO) funds raised in 2015 respectively.
Based on information as at 21 December 2015, Hong Kong is expected to see 123 IPOs raising more than HK$260.3 billion against 115 new listings raising HK$227.7 billion in 2014 by 31 December 2015, a growth of 7% and 14% in the number of new listings and IPO proceeds over last year. Amid developments such as greater market volatility, anticipation over a U.S. interest rate hike, the weakening Chinese economy and uncertain global economic outlook, Hong Kong maintained its significant position as a key financing center for Chinese firms to go international.
Deloitte anticipates Hong Kong to see another fruitful year in 2016 with a strong pipeline of mainly Chinese financial services institutions ranging from securities firms, financial technology company, city commercial banks, insurance firms, and financial leasing companies as well as pharmaceutical firms and state-owned enterprises. The IPO surge is to be fueled by the state government’s ongoing effort of reforming the financial system and state-owned enterprises. The Firm expects Hong Kong to complete 115-125 new listings raising HK$260-280 billion by the end of 2016.
In the A-share IPO market, 220 IPOs are expected to complete raising proceeds of RMB158.8 billion in Shanghai and Shenzhen. As fewer IPOs were approved to launch in 2014, both the number of new listings and funds raised jumped sharply in 2015 by 76% and 102% respectively.
Following a brief suspension of IPO activities in 2015, Deloitte expects the A-share IPO market to become more stable in 2016 and the regulator is likely to modestly increase the IPO activities. That will translate into approximately 380-420 new listings raising RMB230-260 billion in the year. The majority of these IPOs would come from small-to-medium-sized manufacturing, technology, media and telecommunications and consumer and retail companies.