Q3 2015 Review and Outlook of Hong Kong and Chinese Mainland IPO Markets

In the “Q3 2015 Review and Outlook of Hong Kong and Chinese Mainland IPO Markets” report, the National Public Offering Group of Deloitte China analyzed that Hong Kong and Shanghai continued to take the first and second place in the global initial public offering (IPO) ranking in terms of funds raised respectively in the first nine months of 2015.

By 30 September 2015, Hong Kong recorded 72 new listings that raised HK$156.4 billion, 13% fewer IPOs and 19% more funds against 83 IPOs and HK$131.3 billion raised over the first three quarters of 2014.

Deloitte is looking forward to more positive news, including a solid timetable for the interest rate increment in the U.S. and more Chinese economic stimuli measures after the Fifth Plenary Session of 18^th Communist Party of China Central Committee. They are critical to huge offerings, which are waiting in the wings.

The Firm expects Hong Kong to have about 120 new listings that will raise approximately HK$240 billion in 2015. Approximately six to seven companies with large-to-mega IPOs have applied for listing before the end of the year. In addition, the IPO pipeline has more than 90 IPO candidates planning to debut before the U.S. interest rate rise this December or next January.

The A-share market saw 192 IPOs raising RMB147.4 billion. Excluding the third quarter of 2013, the IPO activities for this third quarter were the slowest in five years – completing merely five IPOs and raising RMB1.24 billion.

Following strong volatility in the A-share stock market, IPOs on the Mainland were suspended since 4 July 2015. Deloitte expects IPO at the A-share market may not be able to resume in the remaining months of 2015. Despite various measures and controls, it will take time for investors to regain confidence in the A-share market and for the market to steadily pick up.

Given that 28 companies were approved to list in July and another 42 companies have passed the meetings of the Public Offering Review Committee of the China Securities Regulatory Commission to date, Deloitte estimates that only about 30-50 of these companies will be able to complete their listings once IPOs restart.