Secondary flotations of US-listed Chinese firms buoy 2021 outlook as Hong Kong lands second place in world IPO rankings
- Hong Kong stock exchange will finish 2020 as the second-biggest IPO market globally after raising US$50 billion, KPMG says
- Secondary listings, Chinese issuers’ hunger for capital, loose monetary policy to brighten IPO outlook in 2021, bankers say
Fundraising soared 24 per cent to a 10-year high on Hong Kong’s stock exchange in 2020, as a record surge of secondary listings by US-listed Chinese companies pushed the city to second place behind New York in the global ranking of destinations for initial public offerings (IPOs).
As many as 140 companies raised a combined US$50 billion in Hong Kong this year, according to data compiled by KPMG, including confirmed listings up until December 31. Nasdaq tops the rankings with 175 companies including Airbnb raising a combined US$52.3 billion, based on Refinitiv’s data.
Hong Kong’s IPO market had been the biggest beneficiary of the ongoing deterioration in US-China relations, which has driven Chinese companies like NetEase and JD.com to raise additional capital closer to home, as the US Congress enacts a law to expel Chinese companies from Wall Street for failing to accede to American accounting oversight. The backflow will only increase in 2021, as Joe Biden’s incoming administration is unlikely to reverse the trend, while record-low interest rates drive global investors to search for higher returns from IPOs.