Hong Kong exchange's IPO ranking hit by slowing China and lack of investors
There were many great years for the HK bourse but the easy days seem to be over as it falls out of the top 10 for new listings
What a difference a year has made at the Hong Kong stock exchange. After three consecutive years of being the No1 destination for companies raising funds through initial public offerings, the exchange looks likely to fall out of the top 10 this year.
Skittish investors, a slowdown in the Chinese economy and a weak global economic outlook have combined to smother demand for IPOs, which have powered the growth of the local exchange.
The collapse of the all-important flotation business comes as Hong Kong Exchanges and Clearing (HKEx) tries to remake itself by diversifying into commodities trading with its £1.39 billion (HK$17 billion) purchase of the London Metal Exchange.
Longer term, the mainland exchanges of Shanghai and Shenzhen pose a threat to Hong Kong's traditional equities business - and to its role as a global financial centre.
"When you look back, I think no one will disagree that the HKEx did have some great years and it has, in fact, grown stronger in terms of its ability to attract big-name IPOs, compared with its counterparts in New York or Europe after the 2008 financial crisis", which damped new listings in those markets, said a veteran investment banker who works with the HKEx on offerings and other equity-related business.