Hong Kong world's leading listing hub once again

IPO funds raised surged to new high.

Greater China once again topped the global market for initial public offerings (IPOs), with Hong Kong leading the charge in IPO funds raised.

According to a research note from HKTDC, the year-end report by professional services firm EY recorded a total of 372 listings across the issuers of Hong Kong, Taiwan and the Chinese mainland, raising US$60.3 billion. In Hong Kong, IPOs by number of deals set a new record, and the amount of IPO funds raised surged to a five-year high.

This contrasts markedly with declines in both the New York Stock Exchange – where only 52 companies launched to December 2015, down from 118 in all of 2014, the Wall Street Journal reported – and the London bourse, Europe’s largest, where listings to December only reached US$16.2 billion, compared with US$22.5 billion in 2014. 

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The 121 IPOs launched on Hong Kong’s main board last year raised HK$261.4 billion, up 11 per cent by deal volume, and 12 per cent by funds raised, EY reports. The number of new listings on Hong Kong’s Growth Enterprise Market (GEM) also increased substantially with 34 deals – the highest number since 2003 – and HK$274 million in funds raised, a 27 per cent increase from 2014.

Fourteen issuers migrated from GEM to the main board, the highest number since 2008, when the rules for board migration were relaxed. The top three sectors for these “migrants” were TMT (technology, media and telecom), retail and consumer products, and health.

Dilys Chau, EY Assurance Partner, said the “exceptional” performance of the Hong Kong market was underpinned by large enterprises from the mainland, of which non-commercial bank financial institutions accounted for more than 60 per cent of total funds raised by the top 10 IPOs. Following the last wave of large commercial banks, she said, issuers from the financial sector this time were from a diverse sub-sector, including securities trading, insurance and asset management.