I.P.O.s ready to bounce back in Hong Kong

Firmer capital inflows into Asian markets signal the worst may be over for Hong Kong's initial public offering (IPO) market, according to a veteran banker at JP Morgan.

In an interview with the South China Morning Post, Kester Ng, JPMorgan's chairman of equity capital and derivatives markets for Asia-Pacific excluding Japan, said that unlike 2011 and 2012, investors were currently not gripped by any one single global macroeconomic headwind.

He added lingering problems had either been contained or resolved, creating an environment that was more "conducive for equity investments".

On the back of a recovery in risk appetite, Ng has seen strong inflows into Asian equities funds primarily driven by a large number of US-based investors who look to tap market segments most geared to faster global growth.

Ng said the rotation out of bonds into stocks had started, even though the overall flow from bonds into equities remained modest for now.

"We foresee Hong Kong's stock trading and listing markets to be more buoyant this year," said Ng, who pointed out that investment related to urbanisation and changing consumption patterns towards discretionary goods should win investor attention. Luxury goods and high-end car manufacturers were likely to continue to do well. Meanwhile, banks and insurance companies should benefit from a stronger A-share market and better economic conditions at home.