More mainland financial firms expected to tap Hong Kong stock market
Ten big stock offerings expected as mainland securities regulator eases rules on listing
Hong Kong is likely to see more mainland financial companies listing next year as they move to tap the city's capital markets, global accounting firm Deloitte Touche Tohmatsu said yesterday.
The firm expects 10 significant mainland listing hopefuls, including banks and brokerage houses, to raise a combined HK$70 billion. All told, 70 to 80 companies are expected to raise HK$100 billion to HK$150 billion through initial public offerings. By comparison, HK$89.4 billion has been raised so far this year.
The rosier prediction comes in the wake of news that the China Securities Regulatory Commission is considering easing requirements for mainland companies to list in Hong Kong, part of the industry watchdog's efforts to relieve pent-up demand as about 800 mainland companies have signalled they want to tap equity markets.
According to bankers involved in the listing market, medium-sized banks, such as Bank of Shanghai, China Everbright Bank and Guangdong Development Bank, plan to revive their long-delayed share sales next year, swayed by the successful listing of People's Insurance Co (Group) of China earlier this month.
The mainland's largest non-life insurer raised US$3.55 billion, after it fully exercised a so-called greenshoe option to issue more shares under the retail portion of its public offering.
"To get listed in the tough market, Chinese issuers will adopt more reasonable valuations for their offerings," said Edward Au, a partner at Deloitte.
He also said some credit-strapped European lenders could even tap the Hong Kong market to meet higher regulatory capital requirements.
Au forecast the mainland listing market would be largely flat next year, with 100 billion yuan (HK$124 billion) projected to be raised through 150 listings. So far this year, 154 companies have listed on the mainland, raising 103.4 billion yuan, according to Deloitte.