IPOs return to Hong Kong after slow summer, but trade war, protests could rain on market sentiment, experts say
- ESR Cayman, Anheuser-Busch InBev have revived shelved listings in Hong Kong
- Improved investor sentiment could extend the window for new listings, according to Credit Suisse
After months of bruising protests in Hong Kong’s streets and escalating tensions between two of the city’s biggest trading partners, companies are starting to feel comfortable enough to return to Hong Kong’s financial markets.
Logistics real estate developer ESR Cayman and Anheuser-Busch InBev both announced plans this week to revive initial public offerings that were shelved over the summer amid weak investor sentiment.
Home Credit, a consumer finance lender that counts China as its biggest market, has begun speaking with institutional investors in recent weeks ahead of its planned US$1 billion listing in Hong Kong later this year. It would be one of the biggest IPOs in Hong Kong this year.
Those listings, if they perform well, could open the door for more IPOs in what has been an exceptionally slow summer for the Hong Kong stock exchange.
But, the question remains how long the window will remain open, particularly if the trade war between the United States and China reignites, investment strategists and market observers said.
“There’s an improving window of opportunity in terms of investor sentiment and appetite, which I think companies will seek to take advantage of,” said John Woods, Credit Suisse’s chief investment officer for Asia-Pacific. “I suspect improving sentiment could extend beyond a short term ‘window’ and could actually shape risk appetite for the duration of the year. If that is indeed the case, I think we could see more IPOs in the coming months”.