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    Hong Kong exchange headed to worst IPO finish in a decade

    HONG KONG (AFP) – Hong Kong’s stock exchange is on track for its weakest year since 2012 for new listings as the city reeled from the pandemic, rising interest rates and China’s economic uncertainty, according to data released yesterday.

    Hong Kong Exchanges and Clearing (HKEX) said this year it had 69 new listings raising HKD87.8 billion (USD11.3 billion) as of November 30, down 74 per cent from the year before. The bourse said “renewed momentum” in the second half of the year accounted for nearly two-thirds of the initial public offerings (IPOs), following a slump during the city’s worst-ever coronavirus outbreak.

    “The macroeconomic and geopolitical backdrop led to weak sentiment and softness in the global IPO market,” the exchange said.

    The latest figures were a steep drop from peak levels in 2020 when IPOs raised HKD400 billion, as Hong Kong benefitted from the bonanza of Chinese mega-companies opting to list closer to home.

    Before the pandemic Hong Kong’s bourse was often crowned as the top IPO venue in the world, drawing more than 100 new listings annually between 2013 and 2020.

    HKEX shares have lost 28.3 per cent since the start of the year while the city’s flagship Hang Seng Index is down 18 per cent.

    But both have seen a rebound in the past six weeks.

    As China pivots towards reopening, bankers and analysts expect a slew of mid-sized Hong Kong deals in the first quarter will drive a recovery in listings.

    “With the transition toward a reopening, we anticipate several delayed Chinese IPOs and follow-on transactions to occur in the near term,” Murli Maiya of JPMorgan Chase in Hong Kong told Bloomberg News.

    Hong Kong Exchanges and Clearing (HKEX) says ‘renewed momentum’ in the second half of the year accounted for nearly two-thirds of the IPOs, following a slump during the city’s worst-ever coronavirus outbreak. PHOTO: FINANCIAL TIMES
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