More IPO in Hong Kong this year

Encouraging listings raise hopes Hong Kong can again become top IPO hub.

KPMG China forecasts IPO volumes in Hong Kong at US$16.1 billion this year, up 40% from US$11.4 billion in 2012. It expects the second quarter to be quite good with the end of the Chinese New Year that suspended deal making activity in the city for a week.

Investors are eyeing two huge IPOs. Chinese state-owned oil firm China Petroleum and Chemical Corporation or Sinopec, Ltd will list its engineering unit for US$1.5 billion.

Brokerage China Galaxy Securities Company intends to raise US$1.9 billion from its IPO. Analysts believe both IPOs will go to market in the second quarter.

Hong Kong has seen six deals so far this year that raised US$788 million compared to US$452 million year-on-year, and US$256 million in 2011.

Hong Kong was the world’s top IPO venue from 2009 to 2011. It plummeted to fourth in the global rankings in 2012, dragged down by the faltering Chinese economy.

Many companies, however, are expected to list in Hong Kong this year with the next two months being critical to Hong Kong’s aim of again becoming the world’s top IPO center.