Hong Kong and Chinese Mainland IPO markets in 2014 -Interim review and outlook

Amid the downward pressure of the Chinese economy, Hong Kong's initial public offering (IPO) market scored the strongest performance in terms of funds raised since 2011 and the Chinese Mainland missing the market expectation in the first six months of 2014.

As of 30 June 2014, Hong Kong has raised HK$81.3 billion from 48 IPOs, 105% and 118% up compared against HK$39.7 billion raised out of 22 IPOs over the same period of last year. As a result, Hong Kong ranked the fourth position in the global IPO race after NASDAQ.

Over to the Chinese Mainland, 52 companies completed their IPOs raising RMB35.3 billion at the same time. Both were 50% and 51% down respectively from 104 IPOs raising RMB72.6 billion over the same period in 2012. The slower IPO activities put the Shenzhen Stock Exchange and Shanghai Stock Exchange out of the top five positions in terms of IPO funds raised against other key stock exchanges globally.

Looking ahead, Deloitte projects that Hong Kong to complete over 100 IPOs, raising HK$170 billion by the end of 2014 and Hong Kong is still able to compete with NASDAQ to take the third position in the global IPO ranking in 2014.

Based on the recent guidance from the China Securities Regulatory Commission, which stated that about 100 companies would go public from late June through the end of the year, Deloitte believes that about 150 companies would complete their IPOs at the Mainland bourses in 2014, raising RMB90-100 billion, a level that is slightly lower than that in 2012.