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FINANCIAL SERVICES | Alpha Bierneza, Hong Kong
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Hong Kong's 25 largest accounting firms 2016

Major IPOs to keep HK’s accounting firms busy in 2017.

Hong Kong was the world’s leading exchange by capital raised with 19% of the global total, ahead of Shanghai with 12% in 2016.

Hong Kong’s major accounting firms will be busy in the coming year as they work on more deals in the world’s largest market for new listings. Despite heightened global political and economic uncertainty, Hong Kong – HKEx’s main board and Growth Enterprise Market (GEM) – was the world’s leading exchange by capital raised with 19% of the global total, ahead of Shanghai (SSE) with 12%.

By volume, Shenzhen (SME board and ChiNext) ranked first with 121 IPOs (11.5% of the global total), slightly ahead of Hong Kong (main board and GEM), which ranked second with 117 IPOs (11.1%), ahead of Shanghai (SSE) in third place with 104 (9.9%). Greater China exchanges hosted four of the ten largest IPOs globally by proceeds in 2016, including the largest deal of the year of Postal Savings Bank of China Co. Ltd., which raised US$7.6b on HKEx in September. “After a period of uncertainty in the latter part of 2015, confidence and stability have returned to the Greater China IPO market, with the number of deals steadily increasing quarter-by-quarter throughout the year. In terms of stock exchange in Greater China, due to a slow-moving first six months, there were 360 IPOs in 2016 (2015:360) raising US$48.3b in capital, down 17% on 2015,” says Ringo Choi, EY Asia-Pacific IPO leader.

Market stability

EY adds that the capital markets in Greater China returned to stability this year with its stock exchanges topping the global exchanges leader board in terms of both IPO volume and capital raised. “The CSRC has started to accelerate the IPO approval process and we expect this trend to continue in the coming months. Moreover, the launch of the Shenzhen-Hong Kong Connect program would gradually draw greater participation by overseas institutional investors in the A-share market and further boost market sentiment in the long run. With a strong pipeline of companies ready to list and investor sentiment unaffected by political shockwaves elsewhere in the world, we expect Greater China exchanges to remain the world’s most active markets for IPOs in 2017,” he says.

Clearly, China is expecting a vibrant business sector for the coming year. To help understand how Chinese executives are adapting strategies to reposition for new growth, PwC polled more than 220 Chinese executives with operations in mainland China and Hong Kong, as part of its 2016 APEC CEO Survey and shared their views on doing business in China. According to PwC, even though China is still facing uncertainty in the macro-economic environment, some sectors are better poised for growth than others. Technology and financial services executives are especially optimistic about their business prospects in the coming year, drawing on the potentials of the fledgling fintech space. Around a third of executives in these sectors estimate annual average industry growth of at least 8% a year over the next three years.

Who made it to HKB’s list?

This year’s rankings saw the top 5 largest accounting firms maintain their spots from last year. All 5 firms also increased their total number of staff compared to 2015. PwC is still the largest accounting firm, with 3,900 staff in 2016, which reflects an 11% increase from last year. EY came second with a 2,900-strong staff, up 23% from 2015. Deloitte is ranked third with a 3% increase to 2,265, whilst KPMG’s staff numbers inched up 4% to 2,200. BDO is the fifth largest firm with 1,100 staff, up 10% from last year. Hong Kong Business compiled the firm-provided data from August to September 2016.

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