White Collar | Let battle commence: New York, Hong Kong IPO rivalry set to intensify
As New York fights back to reclaim its former glory as the global listings capital, analysts foresee a long, hard-fought battle with Hong Kong
The rivalry between Hong Kong and New York for global IPO supremacy may be set to intensify.
Hong Kong lost its crown as the world’s No. 1 destination for initial public offerings in the first quarter as a dearth of mega-listings saw the city drop to fourth place, behind New York in first, Shanghai in second and Shenzhen in third.
Analysts believe the new American administration under President Donald Trump has a renewed determination to capitalise on that success after years of watching the US’ reputation as the world leader in attracting IPOs decline.
I think President Donald Trump and Jay Clayton, his nominee to be chairman of the SEC, will focus on increasing the number of IPOs on US stock exchanges
As New York gears up to fight harder for new listings, Hong Kong’s stock exchange is going to have to up its game in what is likely to become a long and bruising battle for the IPO top spot.
The first key battleground could be the listing of Saudi Aramco, the national oil company of Saudi Arabia, which has an estimated value of about US$2 trillion.
“IPOs in the US have been declining for some time now partly because of competition from the other two leading centres of capital formation, Hong Kong and London. The administration wants to reverse that downward trend since deep capital markets are essential to increasing US economic growth after eight years of a slower than usual recovery,” said Norm Champ, a partner at law firm Kirkland & Ellis, and the former director of investment management at the US Securities and Exchange Commission (SEC).
“I think President Donald Trump and Jay Clayton, his nominee to be chairman of the SEC, will focus on increasing the number of IPOs on US stock exchanges.”
Champ recently published a book, Going Public, looking at the SEC and the changes needed to strengthen the US financial system.