Chinese banks surge ahead amid Hong Kong’s IPO wave, challenging global giants

Chinese investment banks are raking in billions of dollars as they overtake their global rivals amid Hong Kong’s wave of initial public offerings led by technology firms, while Beijing pushes ahead with its ambition to forge a home-grown Goldman Sachs.

The dominance of a handful of Chinese investment banks has extended to the IPO business, one of the most profitable segments, with Beijing-based China International Capital Corporation (CICC) taking the top ranking in both the Hong Kong and mainland China markets.

CICC, controlled by the central government, helped raise US$3.23 billion from 36 deals in Hong Kong during the first half of this year, capturing a 12.23 per cent market share, LSEG Data & Analytics showed. Its total funds surged 166 per cent year on year compared with the same period last year.

Huatai Securities ranked second with US$2.48 billion from 18 offerings, capturing a 9.39 per cent market share, followed by Citic Securities with US$1.88 billion from 31 deals.

In the A-share markets, the top five IPO underwriters were CICC, Citic Securities, Guotai Haitong Securities, Shenwan Hongyuan Securities, and SDIC Securities, according to Chinese financial market data provider Wind.

“We believe securities firms with strong business and capital profiles are best placed to advance the nation’s strategic objectives and are likely to receive greater state support,” global credit rating agency Fitch said in a report on June 29.