[ET Net News Agency, 24 September 2020] The National Public Offering Group (POG) of
Deloitte China released its latest analysis of the initial public offering (IPO) markets
in the Chinese Mainland and Hong Kong for the first three quarters of 2020, and its
forecast for their performance over the rest of this year.
Statistics indicate that the stock exchanges in Shanghai, Hong Kong and Shenzhen will
claim first, third and fifth positions in the global IPO ranking by total funds raised in
the first nine months of 2020, following the completion of many prominent flotations,
including those of HK-listed companies on the SSE STAR Market and US-listed Chinese
companies in Hong Kong, and the launch of ChiNext's registration-based regime.
The market is looking forward to massive A- and H-share flotations by a Chinese fintech
group in Shanghai and Hong Kong next month.
By 30 September, Hong Kong is expected to have recorded 99 new listings raising HK$213.8
billion, versus 98 IPOs raising HK$127.8 billion in the same period of 2019. This
represents a 1% rise in the number of IPOs and a 67% surge in proceeds raised.
"The new secondary listing regime came at a good time to assist US-listed Chinese new
economy companies to diversify their fundraising routes into a global market in an Asian
time zone amid geopolitical tension," said Edward Au, managing partner, Southern region,
Deloitte China.
The National POG expects there to have been 293 IPOs raising RMB355 billion in the
Chinese Mainland by end-September 2020, representing increases of 131% in the number of
new listings and 153% in proceeds raised, versus 127 new listings raising RMB140.1 billion
in the first three quarters of 2019. The Shanghai bourse led with 179 IPOs raising
RMB274.7 billion, largely due to the conclusion of two mega listings. Shenzhen contributed
114 new listings raising RMB80.3 billion.
Amid the impact of Sino-US regulatory actions and developments in bilateral relations,
slightly more Chinese companies have raised funds in the US recently, boosted by huge new
listings by a property portal and two manufacturers of new energy vehicles in July and
August. The market is expected to have seen 22 IPOs raising US$8.44 billion by the end of
September 2020, versus 21 new listings raising US$2.90 billion in the first nine months of
2019, representing increases of 5% in deal number and 191% in proceeds.
In the last quarter of 2020, Hong Kong is expected to see another two or three secondary
listings, on top of two or three mega listings that could raise up to HK$7.8 billion each.
In addition to the Chinese fintech group, these mega listings could include a healthcare
company and a consumer brand.
Adding in its results over the first nine months, Hong Kong is expected to close 2020
having seen 140 new listings raising nearly HK$400 billion.
The SSE STAR Market is expected to have seen 140-170 new listings raising RMB320
billion, or could even exceed RMB400 billion, by the end of the year, followed by ChiNext
with 120-150 IPOs raising RMB100-130 billion. The Main Board and SME Board are expected to
have seen 120-150 IPOs raising RMB130-160 billion.
"We expect more new listings on the SSE STAR Market and Shenzhen's ChiNext following the
launch of registration-based regime reform. The Chinese Mainland market is therefore
likely to raise more funds than it did in 2010, which was a record high," said Anthony Wu,
A-share capital market leader at Deloitte. (KL)