Hong Kong behind NYSE, Nasdaq in IPO rankings in first half of 2019 as extradition bill and trade war weigh on sentiment

Hong Kong’s stock market is expected to rank third, and Shanghai fourth, in global IPO market rankings for the first half this year, according to latest analysis by Deloitte China's National Public Offering Group. Both markets have been hit hard by macroeconomic turbulence caused by the US-China trade war as well as political uncertainties.

The New York Stock Exchange (NYSE) and Nasdaq are expected to occupy the top two places with mega initial public offerings in the period under review, Deloitte said on Wednesday. Hong Kong lost its crown to New York and the Nasdaq in May.

The “Big Four” firm, however, reinforced its full-year forecast for about 200 listings in Hong Kong raising between HK$180 billion (US$23 billion) and HK$250 billion, as it believes many Chinese financial companies will raise funds in the special administrative region, including at least three mega listings in the third quarter that are expected to raise at least HK$7.8 billion each.

“These prospective issuers have diverse businesses, are prominent in their sectors and are the types of companies that are crucial to Hong Kong’s role as an international financial centre, and Asia’s international listings hub,” said Kinson Lau, leader for Southern China at Deloitte China's National Public Offering Group.

A mega listing by logistics real estate developer ESR Cayman, which was which was supposed to raise as much as US$1.24 billion this month in Hong Kong and Asia’s largest listing this year, would have helped the special administrative region’s cause.

But ESR postponed the flotation last week citing escalating tensions related to Hong Kong’s controversial extradition bill and to the trade war between the United States and China.