Funds raised from new share listings in Hong Kong sank 90 per cent year-on-year in the first quarter, pushing the city to sixth place in the global rankings for initial public offerings (IPOs), but some analysts expect a rebound later this year. Hong Kong’s main board saw 11 companies raise US$1.72 billion, the lowest since the first quarter of 2013, according to Refinitiv data as of March 28. IPOs in the city have dried up over the last six months because of China’s technology crackdown, with offerings in the first quarter hit further by Hong Kong’s ongoing coronavirus outbreak. However, Hong Kong Exchanges and Clearing chief executive Nicolas Aguzin remains positive. He said on Tuesday that the bourse operator had over 170 listing applications. Accounting firms KPMG and EY said they were also confident of IPOs returning later this year. “In many parts of Asia-Pacific, the Covid-19 pandemic is still impacting the economy and IPO activity,” said Ringo Choi, IPO leader for Asia-Pacific at EY. “There is, however, optimism of more IPO activity to come in the second half of the year.” Louis Lau, partner of capital markets at KPMG China, said Hong Kong stock exchange’s plan to undertake further listing reforms to allow pre-revenue tech giants to list here would attract high-quality tech firms to list. Top 10 Stock Exchanges Rank Stock Exchange Proceeds(USD M) Market Share No. of New Listings 1 Korea 10,749.4 27.3 1 2 Shenzhen ChiNext 7,645.5 19.4 33 3 Shanghai Star Market 6,056.5 15.4 24 4 Saudi 3,226.9 8.2 6 5 Nasdaq 2,193.8 5.6 21 6 Hong Kong main board 1,724.1 4.4 11 7 Oslo 1,110.1 2.8 2 8 Shanghai main board 1,109.2 2.8 10 9 National Stock Exchange 1,014.1 2.6 12 10 The Bombay Stock Exchange 1,009.7 2.6 13 Total 39,344.8 279 Source : Refinitiv “Easing the listing requirements, while keeping investor protection in balance, should make Hong Kong’s capital markets increasingly attractive to high-growth and innovative companies from China and other regions,” Lau said. “Not only would this support Hong Kong’s aspiration as an important hub for hi-tech development in the Greater Bay Area, but also strengthen the city’s value proposition as a leading global IPO market,” he added. Hong Kong IPO issuers forced to accept lower valuations as geopolitical tension, coronavirus fifth wave sap investors’ demand Hong Kong, the largest IPO market worldwide seven times in the past 13 years, fell four places in the first quarter from a year earlier. None of the 11 IPOs in Hong Kong could squeeze into the global top 10 in the first quarter. JL Mag Rare-Earth, which raised US$544.6 million in January, was the city’s largest but ranked 11th worldwide, Refinitiv data showed. South Korea was the top IPO market in the first quarter, thanks to the US$10.8 billion raised in January by battery maker LG Energy Solution. This is also the world’s largest IPO so far this year. Shenzhen’s ChiNext and Shanghai’s Star Market ranked second and third, respectively. Saudi Exchange came fourth, while Nasdaq, which usually tops the list, dropped to fifth place in the first quarter, Refinitiv data showed. Globally, total IPO proceeds including those from secondary listings fell 65 per cent year-on-year to US$39.3 billion in the first quarter. Top 15 Hong Kong IPOs to keep an eye on in 2022 “The Russia-Ukraine war, the pandemic as well as China’s tech crack down have led to a slowdown in IPOs in Hong Kong and around the world,” said Robert Lee Wai-wang, lawmaker for the financial services sector and CEO of Grand Capital Holdings. He said IPOs will be back when the outbreak subsides as it will allow people to travel and meet to get deal-making going. However, Joseph Tong Tang, chairman of Morton Securities, was a bit more pessimistic, saying that the revival of Hong Kong’s IPO market was some way off. “Tech companies in China now need to go through restructuring to comply with the new regulatory requirements and this may take one to two years to complete before they can seek a listing in Hong Kong,” Tong said. “This means no new blockbuster listings in the near future.”