Hong Kong investment banks brace for shocks as competition intensifies

Technology firms facing strong IPO headwinds in city, says BOC International official

Reading Time:2 minutes

Daniel Ng believes BOC International will survive the tough competition due to its immense understanding of local regulations and strong network of Chinese investors. Photo: Jonathan Wong

Published: 12:00am, 16 Jan 2017Updated: 11:44am, 17 Jan 2017

Competition is intensifying for investment banks in Hong Kong with global economic uncertainty shadowing one of the world’s largest initial public offering markets, an executive at a state-owned investment bank says.

Although the city was ranked global leader for listings last year, total funds raised in the Hong Kong stock market dropped to an eight-year low.

Daniel Ng Menghua, head of the investment banking division at BOC International, the Hong Kong-based unit of state lender Bank of China, said banks were also bracing for the slump in mega listings by shifting their focus to smaller deals from private enterprises.

“Competition is tough,” Ng told the South China Morning Post. “I think there are a lot of companies in this business competing for a shrinking pie.”

The total funds raised in Hong Kong through listings stood at US$24.35 billion last year, beating the US$19.32 billion raised in New York and Nasdaq combined, according to data from Thomson Reuters. But the amount was a 26 per cent fall from the US$33 billion raised in 2015.

Select Voice

Choose your listening speed

Get through articles 2x faster

1.25x

250 WPM

Slow

Average

Fast

00:0000:00

1.25x