IPO activities to pick up: PwC
Updated: 2013-01-03 06:53
By Sophie He(HK Edition)
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A July 2012 file photo shows top management executives of Inner Mongolia Yitai Coal Co pose for a photo at the company's trading debut in Hong Kong. Philippe Lopez / AFP |
Fundraising activities in the Hong Kong financial market are expected to accelerate in 2013, with IPO applications likely to rise to 80 from 65 last year, while total funds raised are to increase to HK$120 to HK$150 billion from HK$89.8 billion last year, according to estimates by PwC.
Affected by the uncertainties in the global economy, the Hong Kong IPO market failed to maintain its number one listing hub status in 2012 in terms of total funds raised. During last year, the city raised HK$89.8 billion capital via IPOs, a 65 percent plunged compared with the total funds raised in 2011, said Edmond Chan, PwC Capital Market Services Group Partner.
The city's IPO market was the fourth top global listing venue in 2012, ranking after the NASDAQ, the New York Stock Exchange and the Tokyo Stock Exchange.
Since the US has pushed forward another round of quantitative easing measures, investors continue to seek for investment opportunities in Hong Kong, bringing with them abundant funds flowing into the capital market. As such, the IPO market is tipped to rebound this year, and it has the potential to regain its position as one of the world's top three IPO markets, said Chan.
Meanwhile, the US Congress broke a rancorous stalemate Tuesday to pass legislation designed to avert the so-called fiscal cliff, which will also boost investors' confidence and provide support to Hong Kong's IPO market in short term, he added.
Improving conditions of China's economic growth, especially since the fourth quarter of 2012, will also benefit the stock markets as well as the IPO markets in Hong Kong and on the mainland.
"We expect that more mainland based small and medium-sized enterprises to be listed in Hong Kong (this year), following the relaxation of listing requirements for H shares and the beginning of the conversion of B shares into H shares," said Chan.
He believes that Hong Kong's IPO market will be more active in the second half of this year, along with the fading away of the uncertainties in global markets.
PwC expects that the major IPO applicants in 2013 will likely come from financial institutions, energy and mining related companies, retail and consumer firms. Chan forecasts that up to four mainland real-estate developers will be listed in Hong Kong as the recent rally in shares price of developers shows that investors are still very interested in this sector.
Some large-scale IPOs are also expected this year and up to HK$80 billion will be raised by eight to 10 new listings, said Chan, adding that these IPO giants are likely from the financial services industry and information technology industry.
"I can assure you that there is more than enough liquidity in Hong Kong to support large-scale IPOs," he stressed.
About five to 10 overseas firms will be listed in Hong Kong, PwC forecasts.
sophiehe@chinadailyhk.com
(HK Edition 01/03/2013 page2)