This is despite a decline in deal numbers last year.
Hong Kong will continue to have an active initial public offering (IPO) in 2021 but with a small increase in listings in H1, according to Ernst & Young.
The firm said that due to the impact of the pandemic, Hong Kong’s 2020 IPO activity saw a decline of 11% in deal numbers compared with 2019. However, 2020 proceeds had increased to 27% compared to 2019 because of an uptick in secondary listings by US-listed Chinese companies on the Hong Kong Stock Exchange.
The technology industry contributed $123.26b (US$15.9b) and is the largest sector by proceeds.
The average first day returns of newly listed companies on the Hong Kong Main Board in Q4 2020 was 19.7% versus 27.4% in Q3 2020.
Though Ernst & Young predicts a return to an active IPO in 2021, the Hong Kong Stock Exchange's proposed increase in profit requirement for listed companies by 150% to 200% may have unforeseen impact to small and medium-sized companies that may not be able to meet the new track record profit requirements as currently proposed.
Do you know more about this story? Contact us anonymously through this link.