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Greater China will soon make most from new listings

Funds raised in new listings in the Greater China region this year are likely to surpass those in the United States, making it the largest such market in the world, according to PricewaterhouseCoopers.

Listings in Greater China - which includes exchanges in Hong Kong, Shenzhen, Shanghai and Taiwan - have surpassed those in Europe for the past two years and the gap with the US has been narrowing, a PwC survey shows.

'The US and Europe are mature markets where most of their large companies have listed. This is different from China, where the economy is rapidly growing and many large players are seeking listings to raise funds for further development,' PwC partner Richard Sun Po-yuen said.

Last year, the greater China region raised US$13.93 billion, 27 per cent less than the $17.67 billion raised in the US. European listings raised $7 billion.

The amount raised in US and European initial public offerings has been falling over the past three years, while greater China has seen annual growth of 27 per cent during the same period.

PwC predicts China will have US$20 billion of new listings this year, while US IPOs will raise about $18 billion.

Despite expectations of an interest-rate rise and the implementation of cooling-off measures in the mainland, Mr Sun believes IPO activity will remain high in the greater China region.

'When mainland companies find it hard to secure bank loans under the cooling-off measures, they will shift their focus to seek listings in Hong Kong or Shanghai to meet their financial needs,' he said. 'The interest rate will go up but the level of the increase will be too small to undermine the listing plans of many mainland firms.'

Hong Kong has led the way in greater China over the past three years, with 278 new listings, followed by 215 in Shanghai, 199 in Taiwan and only one in Shenzhen.

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