Hong Kong sees IPO slowdown reversing

Hong Kong has more than a hundred applicants in the pipeline for initial public offerings (IPOs) and is eyeing more companies and investors from markets including the Middle East and Southeast Asia, the chairman of the city’s bourse operator said.

China’s economic slowdown, a sweeping regulatory crackdown that has tightened scrutiny over companies’ fundraising outside mainland China and geopolitical tensions have all resulted in a bleak year for new listings in Hong Kong, reports Reuters.

In recent years, anti-government protests, the imposition of a sweeping national security law, and punishing Covid-19 containment measures have also clouded Hong Kong’s status as a premier financial centre.

Public floats by Chinese companies account for most of the IPOs in Hong Kong, one of the top listing venues globally and a major driver of revenue and fee income for the world’s biggest investment banks.

Roughly $6 billion has been raised via 50 IPOs so far this year in the Asian financial hub, Refinitiv data shows, down sharply from more than $25 billion in 2021. The bourse is on course to see its lowest IPO proceeds in a decade.

“I am quite confident that the IPO market activity will return very quickly in the new year,” Hong Kong Exchanges and Clearing Ltd (HKEX) Chairman Laura Cha said in an interview at the Reuters NEXT conference.