Hong Kong is expected to rank second in the global IPO market in 2020, beaten only by Nasdaq, global accounting firm Deloitte predicted on Wednesday.
Deloitte forecast a total of 145 firms will raise as much as HK$397.3 billion ($51.2 billion) in Hong Kong by the end of this year. Compared with last year, the number of newly listed firms dropped 12 percent, while the fundraising increased 26 percent.
The United States’ Nasdaq is likely to claim the top spot in the global rankings for IPO volumes this year, with 203 newly listed firms raising HK$441 billion, according to Deloitte. Shanghai Stock Exchange and New York Stock Exchange would rank third and fourth, respectively. Previously, Hong Kong had topped the global rankings for two consecutive years.
It is expected that Hong Kong Exchanges and Clearing could see a total of 16 super-large-cap (above $1 billion) listings in 2020, all of which are Chinese mainland firms, including six secondary listings.
These headline-making tech floats include e-commerce giant JD's HK$34.5 billion IPO, its healthcare arm JD Health's HK$31 billion listing, and the HK$24.3 billion offering from game giant NetEase.
Following Alibaba’s example, many US-listed mainland companies are going back to Hong Kong for a secondary listing this year to better attract mainland capital. Deloitte expects more mainland companies will have secondary listings in Hong Kong next year.
The Hong Kong stock exchange, together with its US and Shanghai counterparts, are expected to remain strong in the coming year, being the top three contenders in terms of IPO fundraising, said Edward Au Chun-hing, co-leader of Deloitte’s national public offering group.
Deloitte expects 120 or 130 firms to make their debuts in Hong Kong in 2021 and raise more than HK$400 billion, beating the record fundraising of HK$412.2 billion in 2010.
Among them, more than 10 secondary listings are expected to raise over HK$100 billion altogether. Meanwhile, four or five super-large-cap listings are expected to raise more than $10 billion each.
It is premature to gauge whether Hong Kong will regain the top spot in 2021, as that depends on the market’s situation in that time.
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