[ET Net News Agency, 17 June 2020] In 1H 2020, the Chinese Mainland and Hong Kong
initial public offering (IPO) markets are set to have remained strong amid the COVID-19
pandemic, according to the latest Deloitte China National Public Offering Group analysis.
Helped by a large number of tech listings on the SSE STAR Market, Shanghai Stock
Exchange sustained its global leadership in IPO funds raised, surpassing New York Stock
Exchange and Nasdaq once again.
Hong Kong Stock Exchange rose to third place following the mega secondary listings of
two US-listed Chinese tech firms.
Supported by the resilience of tech businesses, abundant market liquidity and various
regulatory reforms, these trends are set to continue in 2H 2020. They will eventually form
a cluster of dual-listed Chinese tech companies, allowing these businesses to meet
domestic and international investors' appetites and support their rapid growth.
The tech sector remained vibrant even as most economic and business activities were
suspended due to COVID-19 lockdowns. As the pandemic in the US and Europe has yet to
subside, capital including some from various easing and relief measures, is flowing into
Greater China seeking investment targets, providing financing opportunities for further
tech sector growth.
In 1H 2020, Hong Kong is expected to have had 59 new listings, 22% fewer than in 1H
2019. However, proceeds are expected to have increased by 25% to about HK$87.1 billion
from HK$69.9 billion.
Boosted by new listings on the STAR Market, the Chinese Mainland is expected to have
recorded about 117 IPOs raising RMB138.1 billion in 1H 2020, up 83% and 129% respectively
from 64 new listings raising RMB60.4 billion in 1H 2019. Shanghai, with about 72 IPOs
raising RMB110.5 billion, is set to have remained ahead of Shenzhen (45 listings; RMB27.6
billion).
IPO activity among Chinese companies in the US remains subdued by the pandemic, intense
Sino-US relations and policy headwinds. About 12 new listings are expected to have raised
US$1.84 billion in 1H 2020, versus 15 companies raising US$1.64 billion in 1H 2019. Large
offerings from a cloud business, biotech company and an online retail and distribution
platform contributed to the small increase in IPO proceeds. (KL)