Hong Kong IPO fundraising craters to two-decade low; city must do more to claw back share listings amid headwinds: EY

Funds raised by share listings in the city declined 59 per cent year on year to US$5.3 billion as of November 17, firm says

Government and regulators must continue efforts to enhance liquidity and woo foreign capital, report urges

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Hong Kong’s financial district, anchored by the International Finance Centre, reflects on Victoria Harbour on August 29, 2023. Photo: Jelly Tse

Published: 6:00pm, 21 Nov 2023Updated: 6:14pm, 21 Nov 2023

The haul from initial public offerings (IPOs) in Hong Kong has hit a two-decade low, and regulatory improvements must continue to overcome ongoing headwinds expected in 2024, according to an EY report.

Funds raised by share listings in the city declined 59 per cent year on year to HK$41.3 billion (US$5.3 billion) as of November 17, according to the report, released on Tuesday. The city saw a total of 61 companies list, a year-on-year decline of 19 per cent.

These declines came amid a slowdown in global IPO activity: proceeds fell 35 per cent and the number of deals fell 12 per cent year on year, according to EY’s report.

Amid market volatility and macro uncertainty, companies, private equity firms, venture capitalists and investors are likely to remain cautious and disciplined approaching the end of the year, the report said. Proactive measures to improve market liquidity are crucial to revitalising the Hong Kong capital market, said Jacky Lai, spokesman for EY Hong Kong’s capital market service.

People walk through the piazza in front of Exchange Square, the headquarters of Hong Kong Exchanges and Clearing, the city’s bourse operator, on September 6, 2023. Photo: Elson Li

For example, the launch of the Fast Interface for New Issuance (FINI) platform is a major initiative that will significantly shorten, modernise and digitise Hong Kong’s settlement process, Lai said.